China has updated its list of permitted destinations for group tours for the third time this year, giving a helping hand to Asian travel and leisure stocks.
With more than 70 destinations approved this time round, the move means there is now a green light for Chinese group tours to over 130 places in total. Africa, Asia-Pacific, Europe, and North America will all benefit.
Group tours are a popular way to travel for Chinese holidaymakers. They now have permission to return en masse to some of their favourite destinations, including Australia, Japan, and South Korea.
Some bans had been in place in recent years due to COVID-19 restrictions, while the embargo on South Korean destinations had lasted six years after the implementation of its Terminal High Altitude Area Defense system.
European countries able to receive groups of Chinese tourists now include Finland, Germany, Sweden, and the UK. The European Travel Commission celebrated on social media platform X:
In the Middle East, beneficiaries from the newly relaxed rules include Israel, Lebanon, Oman, and Qatar.
2. Market response
Markets responded positively with stock values for a number of Asian tour agencies, hotels and airlines immediately rising after Thursday’s announcement.
CNBC notes that, despite the arrival of Typhoon Khanun in South Korea on Thursday causing thousands of cancelled flights and evacuations, the peninsula’s travel sector had a significant boost. Shares in leisure conglomerate Lotte Tour Development soared by 25%. In addition, Samsung-affiliated high-end hotel brand Shilla rose by 14%. Asiana Airlines added 7% and Korea Airlines went up by 3.1%.
Elsewhere Japan and Australia also saw market upticks, though more conservative. Japanese travel agencies H.I.S and Airtrip rose 3.4%, 2.9% respectively.
Australia’s flag carrier Qantas had a negligeable upturn, as did Australian travel stocks.
3. In China
With China’s economy sliding into deflation, this easing of group travel restrictions gives the leisure sector a much-needed shot in the arm.
It’s a milestone for the full resumption of the outbound travel, and will also strongly push the resumption of international flights, especially for Japan, Korea, the US.Zhou Weihong, deputy general manager at Spring Tour, for The Guardian
Outbound travel made up only 1.58% of the overall Chinese tourism market in 2023’s first quarter, measured by numbers who travelled, with Chinese tourism agencies recording 318,600 outbound trips. This compares to 155 million Chinese visitors to another country in 2019, according to consultancy firm McKinsey.