The China rebuild: Long road back for valuable tourist market

Chinese tourists have started returning to New Zealand, but a tourism leader says increasing air capacity and positive bookings will result in numbers building.

And air cargo between New Zealand and China is now stronger than it was before the pandemic.

Before Covid-19, China was New Zealand’s second-largest market by arrivals, providing 11 per cent of the total number of visitors.

Chinese visitors spent $1.7 billion a year, 15 per cent of all visitor spending. Of that, $333m was spent in the regions.

Chinese visitors have been able to travel here this year, since China abruptly dropped its Covid-zero stance and opened its borders on January 8.

Stats NZ figures show that, for the full year to the end of May, there were 51,845 arrivals (effectively for five months since January), down from 421,707 for the same 12-month period before the pandemic. Many of those who initially came here were visiting friends and relatives – what is known as the VFR market.

Lisa Li, managing director of China Travel Service, said the strong return of those VFR travellers was expected and mirrored what happened when travel resumed between other countries.

She said there was still strong interest in New Zealand, particularly among a growing number of free, independent Chinese travellers – the most valuable visitor segment.

“They will treasure the opportunity to go overseas and try to make good use of all the opportunities and to seek the best experience. It is a very notable trend for Chinese visitors to seek out an immersive, authentic experience.”

There had already been an incentive group of 300 people arriving from China and later this year Amway plans to bring 6700 visitors to this country.

Tourism Industry Aotearoa chief executive Rebecca Ingram said the pace of the return of Chinese visitors was not a surprise, especially as travel has been possible only since January and airline connections are returning. The industry had always been expecting a staged recovery.

“What we have heard from members is that the market is definitely picking up, particularly among ‘free independent travellers’ (solo travellers, families and couples). We anticipate increased arrivals tied to upcoming holidays in China like Golden Week in October and Chinese New Year in February 2024. We look forward to welcoming and celebrating with them.”

She said building and reconnecting relationships was key.

Prime Minister Chris Hipkins’ recent visit to China was important for the business relationship between the countries and this year there were 68 high-quality Chinese buyers at the Trenz tourism event in May, slightly more than in 2019.

Air capacity is now running at more than 80 per cent of pre-pandemic levels between mainland China and Auckland, and this is scheduled to increase to 93 per cent by the end of the year. China Southern and Cathay Pacific will resume flights to Christchurch over the summer.

Auckland Airport now has five airlines operating 27 weekly flights to and from four Chinese cities, representing an 86 per cent recovery in capacity.

Air New Zealand and China Eastern operate daily into Shanghai.

China Southern was the first airline to fly a Dreamliner into New Zealand. Photo / Greg Bowker

Scott Tasker, the airport’s chief customer officer, said China Southern was also flying daily into Guangzhou and announced recently that it would be moving from daily flights to 10 times a week from November.

Air China has also restarted its link with Beijing four times a week, and Hainan Airlines was the fourth Chinese carrier to restart flights last month, returning to the Shenzhen-Auckland route.

With the return of airlines, China is now New Zealand’s fifth largest visitor market, with May figures indicating a 42 per cent recovery in bi-directional visits between the two nations.

Like Li, Tasker said the initial arrivals were visiting family and friends. But the data indicated travel demand was becoming more about leisure and business. Half of the inbound Chinese visitors were now visiting on a holiday (50 per cent in the May quarter), which had overtaken the number of people coming to see family and friends (29 per cent).

‘’With the recovery well in motion, we’re seeing Chinese travellers taking a considered approach when it comes to their travel choices, looking for destinations they can escape to and relax. There’s a growing trend moving away from major global tourist attractions and instead more towards destinations offering nature-based tourism and outdoor activities, which New Zealand’s tourism clearly offers.”

Tasker said connections between New Zealand and China not only served passenger flows between the two countries for family, leisure and business trips, but these flights also carried connecting traffic through Chinese airport hubs to destinations right across Asia and beyond to Britain and Europe, which was important for global connectivity.

Cargo demand was holding up well and was up 6 per cent for 2022, compared to 2019.

This was largely due to China Southern, China Eastern and Air New Zealand, which continued to operate cargo-only and passenger flights during the pandemic. This helped to sustain air trade and allowed airlines to ramp up passenger flights quickly when China’s border reopened.

“Looking ahead, our summer peak season is when we typically see airline activity ramp up further, making them important months to recover capacity and demand,” Tasker said. “By September we’re expecting Auckland-to-China airline capacity to recover to 93 per cent, with the five airlines we now have operating services.”

Li said one potential handbrake on the visitor recovery was on-the-ground costs in this country. She said the cost of some attractions had risen three times since before the pandemic and accommodation was expensive. This could deter visitors from China, which hasn’t suffered from the high inflation hitting many other countries.

Grant Bradley has been working at the Herald since 1993. He is the Business Herald’s deputy editor and covers aviation and tourism.