Chinese tourists are fueling a recovery in Asia-Pacific’s travel industry

Asia-Pacific’s travel sector is seeing strong growth, with demand for flights set to match pre-pandemic levels this year — thanks to Chinese tourists.

The region’s travel demand in December 2023 improved to almost 83% of 2019 numbers compared with just 57% in January, according to the  International Air Transport Association. These numbers are set to improve.

“The environment at the moment remains positive for most airlines,” Willie Walsh, director general of the IATA told CNBC’s “Squawk Box Asia” on Tuesday. Demand is “just a little bit shy” of pre-pandemic levels, and that goal is expected to be hit this year, he added.

Experts believe Chinese tourists will fuel this demand, particularly as they visit Southeast-Asian destinations within the wider region.

Travel demand from Chinese tourists in Southeast Asia saw a notable rise in January, said James Sullivan, head of Asia-Pacific equity research at JPMorgan. 

“You’re still seeing strong inbound arrivals to other countries in the region, but from an incremental flow perspective, we think ASEAN will be the net beneficiary,” Sullivan noted. 

Research from Citi showed overall outbound China tourist numbers hit 3.6 million during the Lunar New Year holidays from Feb. 10 to Feb. 17, with a majority travelling to ASEAN countries. Thailand, Singapore, Malaysia, Vietnam and Indonesia were their top 10 destinations. 

Outside of Asia Pacific, the U.S., U.K., South Korea, Japan and Australia were popular holiday spots for Chinese travelers. 

More Chinese residents traveled outside of China this Lunar New Year compared with 2023, according to data from travel analytics firm Cirium. 

Thailand welcomed the highest number of Chinese tourists during this period, with flight bookings increasing four-fold to 149,159 this year from 35,094 a year earlier during the Lunar New Year. 

The number of flights booked from China to Singapore surged by almost 6 times to 64,469 this year from 10,873 in 2023.

“Visa-free initiatives introduced in recent months could be a contributing factor to the trend, with Thailand waiving visa requirements and Singapore offering 30 days visa-free travel for Chinese citizens,” said June Lee, marketing director at Cirium, 

She added that flights from China to Malaysia, Singapore and Thailand are expected to increase by 87% from March to June compared with the same period a year earlier.