China is evidence of the world’s pent-up travel demand

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The coronavirus pandemic has crippled the travel industry. But demand for travel? That’s alive and well.

Just look at China, where COVID-19 outbreaks are largely under control. As of September, the number of air passengers traveling within China had equalled the total for all of last year. That’s because of a surge in domestic travel, since international trips remain all but off-limits.

During a Fortune Global Tech Forum virtual conversation on Thursday, four travel experts cited China as proof that travel globally could rebound once the pandemic eases and that domestic tourism can serve as a partial stopgap for the industry until then.

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The domestic travel boom in China is due to “pent-up demand” for international travel, said Craig S. Smith, group president of international for Marriott International. With cross-border trips still off-limits, Chinese consumers are choosing destinations within China instead. “They’re all heading to Hainan and Chengdu and Chongqing and anywhere they can to get a short vacation,” he said.

Other countries in Asia, like Japan and Thailand, are also benefiting from upticks in domestic travel, but not to the same extent as China. “There’s still a lot of caution in all these markets,” said Steve Saxon, partner at McKinsey & Company.

Domestic travel is a less viable alternative to international trips in smaller nations. Singapore, for instance, has largely kept a lid on new local coronavirus infections, but it suffers the disadvantage of being an island of 280 square miles with a single commercial airport.

“We don’t have a big domestic tourism market unlike say China, or Hong Kong, or Australia, and so the impact has been tremendous on our tourism industry,” said Keith Tan, chief executive of the Singapore Tourism Board.

In an effort to counter the loss of foreign tourists, the Singapore Tourism Board launched a $34 million “Rediscover Singapore” campaign to drive interest in domestic tourism, offering travel packages and various discounts to residents of the island nation.

Jane Sun, chief executive officer of Trip.com, touted the growth of domestic travel in China. Trip.com, China’s top online travel agency, reported a quarterly profit this week for the first time since the start of the COVID-19 outbreak, thanks to domestic demand.

Still, Sun hopes that China will be able to set up travel bubbles with countries that have the virus under control—Singapore being one.

“We are hoping that with the joint efforts we have with different travel bureaus and effective governments such as Singapore, we’ll be able to unleash some of the energy for the pent-up demand,” Sun said.

Singaporeans hoping for an outbound trip in 2020 were disappointed earlier this week when Hong Kong and Singapore suspended their planned “travel bubble” until 2021 amid a resurgence in COVID-19 cases in Hong Kong. The delay underscores the precarious nature of such solutions.

The panelists concurred that shuttered international borders remain the primary obstacle for a global travel recovery, and that widespread vaccination against COVID-19 is a vital step in clearing the hurdle.

The U.K. on Monday became the first Western country to authorize a COVID-19 vaccine. It plans to roll out the Pfizer-BioNTech vaccine next week, and the Trump administration’s vaccine chief said the entire U.S. population could be vaccinated by June.

Saxon says it’s possible travel will resume between countries in North America and Europe based on cross-recognition of vaccination.

“We do see a lot of latent demand ready to come back once those borders do open,” but “any opening up of international borders is going to have to be gradual,” Saxon asid.

Tan cautioned that a COVID-19 vaccine will not be a “silver bullet”—risk management strategies like regular testing for the virus will need to be kept in place, and even then, tourism’s rebound will likely be gradual.

Smith of Marriott is hopeful that 2021 vaccine rollouts will trigger a more robust global recovery for tourism and travel. “You know when you’re waiting for that storm to just pass? It feels like we’re getting close, the vaccine’s out there…people really want to get out to travel.”

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