Chinese tourists select cheaper destinations, boosting local spending

BEIJING — Chinese travelers are increasingly selecting cheaper domestic destinations slightly than foreign tourist attractions.

Only 14 percent of high-income households that took a visit abroad last 12 months plan to travel abroad again in 2024, in keeping with a survey released this month by consulting firm Oliver Wyman. The segment includes families in mainland China who earn no less than 30,000 yuan a month ($4,140, ​​or about $50,000 a 12 months).

According to the survey, a very powerful reason why respondents prefer their home country is “the numerous travel options within the country,” followed by “too expensive” trips abroad.

The average cost per person for a visit inside mainland China is lower than 1,000 yuan, in comparison with several thousand yuan for a visit to Hong Kong or Japan, Oliver Wyman said.

Local tourism has been a brilliant spot in China's recovery from Covid-19 controls, which led to late 2022. Travel booking site Trip.com said that in 2023, bookings for rural destinations in China grew by 2.6 times in comparison with pre-pandemic levels.

During a vacation this 12 months from May 1 to five, domestic tourism trips and revenue increased sharply in comparison with pre-pandemic levels in 2019official data showed. According to a CNBC evaluation, international travel was barely below 2019 levels official figures.

In mainland China, smaller cities similar to Yangzhou, Luoyang, Qinhuangdao, Guilin and Zibo saw the most important increase in tourism bookings through the May holidays, Oliver Wyman said.

“This year, domestic tourism will exceed pre-pandemic levels,” said Ashley Dudarenok, founding father of Chinese digital consultancy ChoZan.

She expects the recovery of Chinese outbound travel to take longer, partly because “the feeling that the rest of the world is crazy and uncertain is even stronger than it will be in 2023.”

In contrast, within the United States, a record number of individuals have applied for passports to travel abroad over the past two years. A Skyscanner report said 85% of U.S. travelers plan to take no less than as many trips abroad this 12 months as they’ll in 2023, if no more.

US and Chinese officials held a summit in town of Xi'an last week promote tourism between the 2 countries.

It is unclear to what extent tourism interest will proceed in less developed parts of China, and whether it can translate into sustainable growth. But the short-term impact on some places is important.

The southern Guangxi Autonomous Region, home to The famous limestone hills of Guilinhas issued a plan to spice up consumption this 12 months through increased promoting and tourism subsidies.

In the primary quarter, tourism revenue within the region rose nearly 24 percent year-on-year to 258.18 billion yuan, in keeping with official data. Local authorities said performing arts subsidies from local governments helped generate 48.3 million yuan in ticket sales to 230,000 people, boosting economic activity by about 460 million yuan.

About 2.5 hours by plane east of Guangxi lies the tourist attraction of the Nanjing City Wall. It welcomed almost 1.3 million visitors in the primary quarter and generated revenue of 19.2 million yuan – twice as much as in 2019, in keeping with Local media.

Outside China's major cities, local governments have stepped up efforts to draw tourists, especially through social media.

Guangxi officials said earlier this month that promotional videos for apps similar to Douyin and ByteDance's Xiaohongshu (referred to as “Little Red Book” or “Red” in English) had attracted hundreds of thousands of viewers.

“They're trying to go viral, they're trying to involve their community and their cultural heritage and put it all online,” Dudarenok said. “Once you go viral, you have thousands of tourists at your doorstep.”

People flocked to town of Zibo within the eastern province of Shandong after its barbecue skewer culture became popular on social media last 12 months. Similarly, three million visitors flocked to town of Harbin through the three-day New Year holiday after its ice sculptures and unique Nordic customs gained traction on social media.

Television programmes about specific regions have also helped promote tourism.

Thanks to a television drama set in Altai, the distant a part of Xinjiang province within the far west experienced a almost 38% more visitors from a 12 months ago, through the first three days of this 12 months's May holidays, in keeping with iQiyi, the publisher of the miniseries.

“The TV shows are a big draw,” said Dudarenok, adding that “food is always the most important reason for Chinese tourists to travel.”

China's extensive network of high-speed trains and flights has made it easier for people to go to small towns, even when just for two or three days.

Domestic flight bookings on Trip.com Sales rose 30 percent year-on-year in the primary quarter, the corporate said last week, noting that Chinese consumers now place more value on “emotional fulfillment,” which is driving their interest in personalized travel.

“Intensified marketing efforts in many provinces have effectively encouraged travelers to explore different destinations,” Trip.com management said in its quarterly earnings conference call, in keeping with a transcript from FactSet.

Businesses and native governments are working together in other ways to extend awareness, if not sales.

Representatives of tourist attractions and native governments have approached the Miss Tourism Asia beauty pageant asking for promotional activities, said Yang Hua, chairman of the organizing committee.

“Currently, China's domestic tourism industry is relatively dispersed,” Yang said in Mandarin, translated by CNBC. He hopes to create destination-specific events for cities that may attract visitors in the approaching years.

Miss Tourism Asia shot a promotional fashion video featuring the contestants within the desert surrounding Aral City in Xinjiang last 12 months and held the finals of the wonder pageant on January 1, 2024 within the southern city of Dongguan in Guangzhou province.

According to Oliver Wyman, Chinese consumers' current preference for domestic travel implies that a full recovery in international travel to 2019 levels is unlikely to occur until late 2025, six months later than previously forecast.

In the long run, Dudarenok expects international tourist destinations to want to enhance their experience offerings to maintain pace with the rise of trendy, modern hotels and other travel services in China.

“Chinese tourists [are] not really easy to satisfy,” she said.