Market – Greater China

• ST market research page
• ST Research Report Greater China 2023
• ST TMS 2018 Greater China

After a sudden u-turn in the zero covid policy, the Greater Chinese market saw a gradual reopening in 2023. The first half was marked by a spirit of optimism and relaunch.

With the first physical Switzerland Travel Experience in four years in Hong Kong, the Swiss tourism industry was among the first movers, staging a large-scale trade event in the region and rebuilding crucial connections. Despite the market springing back to action, impediments such as revamping visa processes and high air fares were curbing market recovery.

During the second half of 2023 ‘business as usual’ returned. Switzerland Tourism promoted its partner destinations with a big Summer campaign, a Grand Train Tour campaign in Taiwan, and a collaboration with market leading OTA CTrip as well as a week–long trade roadshow among many other activities. Winter saw a strong comeback with the rising popularity of snow sports in China. A successful winter roadshow in October, culture trip and dedicated Swisstainable campaign in November-December paved the way for a solid start in 2024.

By September 2023, Greater China was back to being the #1 market in the APAC cluster. By the end of the year, 60% of the monthly overnight business was back and market share distribution started to shift back to 2019 levels with 70% guests from Mainland China, 20% from Taiwan and 11% from Hong Kong.

For 2024 Switzerland Tourism expects a continuation of the gradual recovery. 65% of the 2019 overnights are expected and a full recovery of the market is projected for 2026. Due to the market size, rapid development of social mobility, diversity and global relevance of the Chinese culture and language, Greater China remains one of the key strategic markets for Switzerland Tourism.

Mainland China’s economy saw a stronger than expected growth in 2023 with GDP reaching 5.3%. However, projections are still cloudy, with the Chinese economy struggling to pick up the pace after almost 4 years of strict zero covid policy affecting the global supply chain and investor confidence. China’s economy is projected to grow by 4.6% in 2024. Low consumption, rising shipping costs between Asia and Europe paired with a looming deflation, high youth unemployment and a real estate crisis are curbing growth in the world’s secon largest economy. As consumer and business confidence is impacted by high uncertainty, the economy will remain a priority for the Chinese government in 2024. Further stimulus and policy adjustments to boost GDP and foreign direct investment are expected. China’s long-term growth should continue to surpass most Western economies as China’s economy is transitioning towards innovation-led growth with opportunities in consumer tech, artificial intelligence, domestic brands and service spending as well as green technoly.  
 
Hong Kong’s economic recovery continues on a slow path. For 2024 experts are forecasting a GDP growth of 2.7 – 2.9% with 42% of businesses expecting a lower turnout than in 2019. Companies continue to struggle with talent sourcing, although the outflow of talent is gradually slowing down. The Hong Kong government is combatting talent outflow with a new investment visa scheme, aimed to attract investments and talents from the Mainland and abroad. Housing prices are down 20% from their historic peak in 2021 and are expected to continue their decrease in 2024.
 
The economy in Taiwan showed sluggish growth all throughout 2023. As global trade picks up momentum, backed up by the expansion of emerging technologies such as artificial intelligence and high-speed computing, Taiwan’s economy has finally bottomed out and is beginning to rise in 2024. Experts forecast a 3.1-3.5% GDP growth in 2024, partly due to a rebound in private investment and Taiwan’s crucial role in the global trade of semiconductors. While the manufacturing sector continues to be in contraction and Taiwan’s CPI rose way above the alert level of 2%, unemployment rate remains at a historic low with 3.3% and export orders remain at historic high levels leading to a record high trade surplus of US $80.56 billion as of December 2023.   

Domestic and international travel has seen a swift rebound in Mailand China after the sudden and unexpected border opening in January 2023. While domestic travel has resumed rapidly and fully recovered to pre-pandemic levels by the end of the year, international travel is lagging behind with Asian destinations at -60% and worldwide destinations at -66% on average. Nevertheless, Chinese outbound travel is expected to boom in 2024 with 180 million tourists or 120% of 2019 projected to embark on outbound trips. Increased air capacity and optimised visa processing times paired with lower air fares will accelerate travel to European destinations. Swiss International Air Lines has resumed to 75% capacaity of pre-pandemic level, with flights resuming daily operations from Shanghai to Zurich and Hong Kong to Zurich in 2024. Air China is flying to Geneva four times a week from Beijing.

Hong Kong has seen a speedy pick up of air capacity after the reopening, resuming daily flights to Switzerland by the end of 2023. Air capacity from Swiss International Airlines is expected to reach pre-pandemic levels by Q2 in 2024. Outbound travel from Hong Kong has largely bounced back with Hong Kong residents taking 1.32 million trips over the Christmas holidays alone. However, long-haul travel to Europe is lagging behind somewhat due to the high costs. In 2023, Switzerland Tourism recorded 107’353 overnights from Hong Kong residents, around 60% of 2019. The traditional tour operators and travel agents in Hong Kong are struggling with price pressures and low resources and competing for business. Meanwhile, new business models such as experience-driven OTA Klook emerged during the pandemic and are distrupting the market with new ideas.

Taiwan has emerged as the ‘phoenix from the ashes’, with a speedy recovery and appetite to travel abroad. Despite a sluggish economy and less convenient air connections, overnight figures from Taiwan have bounced back quickly and even topped 2019 levels in some months of 2019. Overall Switzerland Tourism recorded almost 200’000 overnights from Taiwan in 2023 or 75% of 2019. There is a strong appetite for European travel among Taiwanese – but Switzerland is chosen overproportionally. High prices and a fragmented business landscape are increasing competition and putting pressure on the travel market. In terms of innovation and qualitky of travel produts, the Taiwan market is leading the pack in Greater China.

Due to higher costs and lower capacity in European destinations a full recovery to the record year of 2019 will take time – but may also not be the ultimate objective anymore. Growth potential in terms of extension of stay, per capita spend and sustainable travel remains high in the Chinese market and should be the focus of the market strategy going forward.

Interest for Switzerland is high among Chinese travelers, thanks to a long-standing presence, great relationships between the region and Switzerland as well as a high perception of natural beauty, comfort, standard and safety in Switzerland. For most Chinese travelers a trip to Switzerland is still considered a very big expense, therefore they want to make the most of their trip and see both the highlights, experience the local and authentic culture, taste the local food and experience various forms of transportation such as cable cars, trains and boats. Shopping is also important for Chinese travelers who want to bring back unique good and gifts for friends and family, especially luxury goods. There is a tradition to buy several items on behalf of friends and family to evade the high import taxes especially in Mainland China. Therefore easy VAT return processes are also valued by Chinese guests.

While Chinese guests are mostly naturally curious, very prepared and eager to learn about another culture, they also value certain comforts they are used to at home, such as: digital payment, avavilability of hot water, Asian or Chinese food options and information and guidance available in Chinese language.

Our team conducted a qualitative survey among 60 buyers from Greater China in November 2023 to assess the biggest needs from the market post-pandemic.

For Switzerland Tourism it is crucial to (1) remain top of mind and create ‘base noise’ with our marketing mix (Campaign & Activation, KMM and KAM) as well as (2) maintain our network and relationships to prepare the market for an opening with a sales-oriented approach. To remain in the (3) pole-position with attractive offers, products and a clear call to action for the opening. 

For 2024 and beyond, ST Greater China will focus on five pillars:

1. Content.
   Adapting to the changing travel trends and behavior of Chinese travelers such as camping, glamping, hiking etc. 
2. Personas.
   Continuous focus on community communication, such as the snow sports community or the culture community. 
3. Sustainability.
   Further roll-out of the Swisstainable program to generate awareness and exchange on the topic. 
4. Platforms. 
   Collaboration with new emerging and dynamic platforms such as Red Book, Mafengwo, Qyer etc. 
5. Call to Action. 
   Stronger focus on lower funnel activities through product development and sales campaigns in collaboration with our partners.