Travel players looking to hedge their bets on China driving the post-pandemic recovery may have to watch the countryâ€™s economic, social and political trends more closely as the market â€śstays on the international travel sidelinesâ€ť.
Peter Harbison, chairman emeritus, CAPA – Centre for Aviation, predicted â€śa lean 2022â€ť and â€śa considerable shift in the way China behaves in futureâ€ť.
Speaking at last weekâ€™s CAPA live on Travelling Again: Outlook for Asia as China stays on the sidelines of international travel, Harbison alluded to many countries in the region not being able to depend on China numbers, which have grown substantially over the last 20 years.
With no China outbound since the pandemic, he cited the creation of â€śsubstitute international operations and generous provisions to buy duty-free goods on Hainan islandâ€ť meeting holiday and business travel demand.
Harbison believes Chinaâ€™s â€śtotal protection from Covid-19â€ť stance would retain and the government would adopt a â€śvery different policy from most of the other countries in terms of being ultra-conservative and opening upâ€ť.
He also flagged Chinaâ€™s birth rate, which declined to 1.3 per household in the last two years, resulting in 750 million fewer Chinese by 2065.
Harbison continued: â€śIf, and the trend suggests this, it falls to one (per household), and that’s not out of the question, the population will reduce by that amount by 2050.
â€śEven by 2030, we’re going to start to see a significant decline in working-age citizens as the population ages. And that has a considerable impact on international travel numbers,â€ť he added.
As for Chinaâ€™s aviation industry, Harbison said past policies stimulated low-yield international outbound growth but â€ścouldn’t really attract much in terms of inbound, which tended to have a higher profile higher premium travellers including business travellersâ€ť.
Given the airlines’ losses, which he described as â€śpretty steepâ€ť, the financial considerations of the major players, which have been heavily subsidised, is perhaps something that is going to influence Chinese policy.