Zona de Azar China – Nomura Predicts China’s Outbound Tourism Faces Challenges in 2024

China.- January 10th 2024 www.zonadeazar.com Nomura, the banking group, has forecasted that China’s outbound tourism is unlikely to match the levels seen in 2019 this year. According to a report, the recovery of outbound overseas tourism from China is anticipated to face significant hurdles in 2024 and possibly extend into 2025.

The report mentioned that “sizeable headwinds remain” for the recovery of outbound tourism, citing factors such as the weakened Chinese yuan against major currencies, the condition of the domestic economy, stagnated income growth, and high youth unemployment.

While “supply-side constraints” have eased, including the availability and cost of flights and exit visas for Chinese travelers, the “demand side” drag on Chinese consumers’ appetite for outbound travel is now starting to take effect.

Nomura’s Monday report expects Chinese passengers carried by cross-border flights to recover to 73 percent of 2019 levels by the end of 2024, averaging 67 percent for the full year. The banking group also anticipates that spending by outbound Chinese tourists will fully recover to 100 percent of 2019 levels for the entire year of 2024.

Highlighting the state of outbound tourism recovery from China, Nomura emphasized that it does not expect international flights and passengers carried by these flights to fully recover until 2025. The report noted a more cautious view on China’s economic performance, consistent with recent data for outbound tourism to regional destinations such as Singapore and Thailand.

Nomura also commented on the poor recovery of international flights to ASEAN countries, stating that flights to the ASEAN-6 nations have only recovered to 58.1 percent of 2019 levels in December.

While Singapore remains the best-performing ASEAN nation, with a recovery rate reaching 81.6 percent in December, concerns arise regarding the possible negative impact on the Asia-Pacific casino industry due to any softness in the recovery of Chinese tourist volume.

Morgan Stanley expressed caution in December about the economic benefit of outbound Chinese tourism in 2024 globally. Both Nomura and Bloomberg Intelligence share the view that China’s international air travel is not expected to fully recover to pre-pandemic levels until 2025.

Edited by: @MaiaDigital www.zonadeazar.com