The Impact of the COVID-19 Pandemic on China's Tourism Industry - Huo Qiongfeng's Keynote Speech at the "7th China-South Korea Tourism Cooperation Symposium"

On the afternoon of June 4, 2020, the "7th China-Korea Tourism Cooperation Seminar," jointly hosted by the China Tourism Academy and the Korea Culture and Tourism Research Institute, was held online. The directors of the two research institutes led their respective teams, along with representatives from the tourism industry and media from both countries, to participate. The directors and their teams shared their experiences in combating the pandemic. He Qiongfeng, Director of the Data Analysis Institute (Tourism Economics Laboratory) of the China Tourism Academy, delivered a keynote speech entitled "The Impact of the Pandemic on the Tourism Industry." Since the outbreak of COVID-19, the China Tourism Academy has responded promptly. President Dai Bin personally led the entire academy's academic team to remain on the front lines of the tourism pandemic response, actively engaging in intellectual pandemic control, gradually establishing a tourism crisis analysis system, and generating a series of research results. Minister Luo Shugang of the Ministry of Culture and Tourism clearly stated at the China Tourism Science Annual Conference that the China Tourism Academy and other institutions are deeply concerned about the industry's development, conducting in-depth research, actively offering suggestions, and fully leveraging their role as think tanks and advisors, providing valuable reference and consultation for targeted policies and solutions to support the tourism industry in overcoming difficulties and recovering. Currently, after the significant tests and stresses of the Qingming Festival and Labor Day holidays, the research team believes that my country's tourism consumption willingness and market confidence are steadily recovering, the momentum for tourism industry development is regrouping, and the annual tourism economic work is returning to the theme of high-quality development of the tourism industry set at the beginning of the year. The research team's findings on the impact and predictions of the epidemic on the tourism industry are briefly reported below. I. Steady Recovery of Tourism Consumption Willingness and Market Confidence During the epidemic, the tourism consumption market experienced a period of pain, recovery, and testing, and has now entered a stage of steady market revitalization. Since the outbreak of COVID-19, key milestones include the Ministry of Culture and Tourism's "closure of scenic spots, suspension of group tours, and fight against the epidemic" on January 24th, the gradual resumption of intra-provincial tourism business in various regions on March 12th based on the development of the situation, and the Minister's attendance at the State Council Information Office press conference on April 30th to introduce the opening of scenic spots and tourism tips for the May Day holiday. The tourism industry has experienced the outbreak, recovery, and testing phases of the epidemic and has now entered a stage of steady revitalization. A special survey conducted by the China Tourism Academy (Data Center of the Ministry of Culture and Tourism) among urban and rural residents during the initial outbreak of the Spring Festival epidemic showed that most respondents judged the epidemic to be "generally controllable"; 71.5% of respondents indicated they would travel after the epidemic stabilized for a period of time, and 20.7% indicated they would travel as soon as possible after the epidemic subsided. More and more people believe that the epidemic will eventually pass, and canceled travel plans will be fulfilled at a more beautiful time. The research team also collaborated with the Ctrip Tourism Big Data Joint Laboratory to survey 15,000 consumers, releasing 15 findings and proposed travel activities. From the Spring Festival and Qingming Festival to Labor Day, tourism consumption has become increasingly active, with urban leisure day trips and suburban tours showing signs of recovery. Tourists generally understand the measures taken under the normalized epidemic prevention and control situation and are satisfied with the services provided by market entities. Based on holiday data monitoring and comparison, during the seven-day Spring Festival holiday (excluding the extended three days), the country received 248 million domestic tourists, generating domestic tourism revenue of 278.1 billion yuan, representing year-on-year decreases of 40.3% and 45.9%, respectively. During the 2020 Qingming Festival holiday, China received a total of 43.254 million domestic tourists, a decrease of 61.4% year-on-year; tourism revenue reached 8.26 billion yuan, a decrease of 80.7% year-on-year. During the five-day Labor Day holiday, China received 115 million domestic tourists, generating a total tourism revenue of 47.56 billion yuan, recovering to 53.5% and 36.7% respectively compared to the 2019 Labor Day holiday on a comparable basis. During the Qingming Festival, the average activity radius of urban residents was 3.6 kilometers, an increase of 36.8% compared to the Spring Festival period; the average recreational radius of out-of-town tourists at their destinations was 12.9 kilometers, an increase of 16.0% compared to the Spring Festival holiday. During the May Day holiday, tourists' average travel time exceeded 40 hours, and the average travel distance was 136 kilometers, with local tourists averaging 40.5 kilometers. The average distance tourists traveled to their destinations was 16.7 kilometers, a 50% increase compared to the average during the 2020 Spring Festival holiday. Tourist satisfaction reached 84.8 points, and the proportion of tourists choosing self-driving travel reached 64.1%, a record high. II. Tourism industry players are actively engaging in industry-wide cooperation and self-rescue, accelerating industry innovation and restructuring. The COVID-19 pandemic since the Spring Festival has severely impacted the tourism economy, causing significant losses to various tourism enterprises, which generally face difficulties such as insufficient cash flow, accounts receivable risks, numerous tourist complaints, and increased operating costs. In the first quarter, the Tourism Economic Operation Composite Index (CTA-TEP) declined sharply year-on-year and quarter-on-quarter, reaching its lowest level in the past 50 quarters. A special survey conducted by the China Tourism Academy on the tourism supply side showed that 54% of the surveyed business owners believed the risks were controllable and they could overcome the difficulties, 24% believed the risks varied depending on the enterprise's capabilities, and 21% believed the risks had increased and more businesses were closing down. Industry insiders have greater confidence in the domestic market, with 26% believing it will recover quickly after the epidemic, 66% expecting a 1-3 month delay, and 70% indicating they will immediately launch market promotions and fully resume production and operations after the epidemic ends. The inherent development trend of the tourism market may be delayed due to the epidemic, but it will not disappear. Self-help measures by tourism enterprises and policy support will, to some extent, offset the adverse effects of the epidemic. Under the coordination and demonstration of industry organizations such as the China Tourism Association and the China Scenic Area Association, and the leadership of large tourism groups, upstream and downstream tourism enterprises and partners are also launching industry mutual assistance initiatives. China Tourism Group launched a franchise store reduction and exemption plan; Jinjiang International raised 3.5 billion yuan for financial support; Ctrip took the lead in establishing a 1 billion yuan recovery fund to assist local cultural and tourism departments in destination marketing; Peak Tourism and Jingyu Lvmama helped local governments with live-streaming sales; Meituan launched a 1 billion yuan consumption upgrade subsidy and released a destination recovery toolkit—all demonstrating the social responsibility and commitment of cultural and tourism enterprises through concrete actions. The COVID-19 pandemic has accelerated product and business model innovation. Self-driving tours, short-distance tours, rural tours, and local leisure tours have driven the rapid development of new business models such as "vehicle-travel collaboration," smart tourism, and digital culture. In May, over 70% of A-level tourist attractions nationwide had reopened, with most scenic spots and public cultural venues gradually resuming operations. The requirements of normalized pandemic prevention and control, and real-name reservations, have objectively accelerated the application of smart tourism in all stages of travel—before, during, and after the trip. Technological innovations such as QR code entry, facial recognition access, contactless services, and robot food delivery have entered consumer scenarios. Survey data shows that during the May Day holiday, 77.4% of tourists visited scenic spots through reservations, with 74.1% of them finding the reservation experience "very good." More than 4,000 scenic spots now offer ticket bookings through online travel agencies (OTAs). To ensure safety and order and prevent tourist gatherings, technological means are being used to manage potential large crowds, including remote diversion and flow control measures, and on-site crowd management. Technologies such as 5G live streaming and VR park tours are boosting the tourism market, bringing popular tourist destinations from the cloud to the physical world, achieving online buzz and offline conversion, and fully launching the "tourism + live streaming" sales model to promote the recovery of intra-provincial and surrounding area travel. Ctrip is stimulating and exploring tourism demand through innovative measures such as "BOSS live streaming pre-sales," "Safe Travel Alliance," "Smart Scenic Area Service Standards," and "Tunchang Lifestyle Hall." Self-driving tourism has driven new "vehicle-travel synergy" business models, including RV rentals, campsites, road trips, comprehensive service areas, motels, maintenance and repair, insurance claims, exhibitions and cultural and creative products, and film and television media, stimulating local government infrastructure construction and social investment. III. The tourism economy is recovering to the theme of high-quality development of the tourism industry throughout the year, and the tourism market is in a critical stage of bottoming out and rebounding. With the nationwide epidemic largely under control and showing a positive trend, business travel gradually recovered by the end of February in East China (Zhejiang, Jiangsu, Anhui, etc.) and South China (Guangdong, Fujian, etc.), which are mainly net population inflow areas, as work resumed in an orderly manner. The leisure tourism market also began to recover as scenic spots gradually reopened. In March, intra-provincial and domestic tourism markets began to recover, with rural tourism scenic spots and integrated scenic areas, primarily featuring flower viewing and other attractions, attracting visitors first. Zhejiang Province pioneered the "Cloud Tour of Zhejiang" live-streaming event, with the "Spring Blossoms - 48-Hour Cloud Tour of Zhejiang" scenic spot-linked live-streaming event alone reaching over 13 million views and over 800,000 likes. However, the recovery of long-distance source markets in western China, such as Qinghai, Tibet, and Xinjiang, as well as Hubei Province and surrounding areas, which were most severely affected by the epidemic, remains difficult in the short term. The impact of the COVID-19 epidemic on the tourism market will continue until the end of the year, but the overall positive and stable development pattern of my country's tourism market remains unchanged. Due to the epidemic, all organized tourism activities were suspended throughout the first quarter. As the COVID-19 pandemic continues to make phased progress, the tourism market is recovering in the following order: first surrounding areas, then domestic tourism, then outbound tourism, and finally inbound tourism. Based on a comprehensive analysis of policy, demand, and supply, and through simulation calculations and professional assessments, the research team is not overly pessimistic about the tourism economy outlook for the first half of the year and the whole year. It is expected that domestic tourism will bottom out and rebound in the first half of the year, achieving a steady recovery. However, the recovery of the inbound and outbound tourism markets is more uncertain, and the overall impact may continue until the end of the year. From a medium- to long-term development perspective, the positive and stable development pattern of my country's tourism market remains unchanged. The pandemic has not affected per capita travel rates or per capita tourism spending, and a recovery is expected after the pandemic. The national tourism system is focusing its efforts on key tasks such as cultural and tourism integration, all-for-one tourism, technological innovation, market entity cultivation, international tourism exchanges, and tourism affairs related to Hong Kong, Macao, and Taiwan, in accordance with the overall requirements for high-quality development of the tourism industry set by the central government.