As China’s economy continues to stagnate, changes in travel and consumption patterns are taking place. Compared to expensive and bureaucratic overseas travel, an increasing number of Chinese tourists are opting for domestic travel destinations with lower prices.
According to a report by CNBC, a leading American consulting firm, Oliver Wyman, released a survey this month showing that only 14% of high-income Chinese families who traveled abroad last year plan to do so again in 2024.
The survey found that the primary reason for choosing domestic travel was the “abundance of domestic travel options,” followed by the “high cost of overseas travel.” The survey targeted mainland Chinese families with a monthly income of over 30,000 yuan (approximately $5,000 USD).
Oliver Wyman stated that the average cost per person for domestic travel within mainland China is less than 1,000 yuan, while traveling to Hong Kong or Japan would require thousands of yuan.
Statistics show that during the May 1st to 5th Labor Day holiday this year, a total of 295 million domestic trips were made in China, a 7.6% increase compared to the previous year and a 28.2% increase compared to the same period in 2019. CNBC estimates that the number of outbound travelers is slightly lower than the level in 2019.
The extensive high-speed rail and train network in China makes it relatively easy for people to travel to small towns, even if they can only spare a few days. In recent years, more and more consumers are inclined to choose to visit smaller cities. Oliver Wyman reports that travel bookings for these smaller cities are growing the fastest.
In the southern part of the Guangxi Zhuang Autonomous Region is Guilin, famous for its limestone hills, which has ramped up promotion efforts and implemented travel subsidies to stimulate local tourism. Data shows that Guangxi received a total of 237 million domestic tourists in the first quarter of this year, a 20.2% increase compared to the same period last year, generating domestic travel revenue of 258.176 billion yuan, a 23.9% increase year-on-year.
In addition to traditional popular destinations, traveling to county towns has become a new trend. Leading travel booking website Trip.com stated that in 2023, bookings for county town travel in China increased by 2.6 times compared to pre-pandemic levels.
According to data from Ctrip, smaller cities such as Yangzhou, Luoyang, Qinhuangdao, Guilin, and Zibo saw an average 11% increase in travel bookings during the recent Labor Day holiday period. Popular county-level destinations like Anji, Tonglu, Dujiangyan, Yangshuo, Mile, and Yiwu saw a 36% average increase in bookings.
It remains uncertain how long tourists’ interest in underdeveloped regions of China will continue, and whether it will translate into sustainable economic growth for those areas. Short-term impacts on some regions are significant.
To attract more visitors to these areas outside major cities, active publicity and promotion campaigns on social media are crucial. Local governments have been increasing efforts to attract tourists.
Earlier this month, the Guangxi government announced that their promotional videos on platforms like TikTok and Xiaohongshu under ByteDance have garnered millions of views.
After barbecue culture in Zibo, Shandong, gained popularity on social media last year, tourists flocked to the city. Similarly, after Harbin’s ice sculptures and unique northern charm became popular on social media, the city saw three million visitors during the New Year’s three-day holiday.
Furthermore, TV programs focusing on specific regions also help promote the development of tourism. Following the airing of the drama “My Altay” on iQIYI on May 7th, Altay has become a popular tourist destination for domestic travelers. The number of visitors to Altay increased by nearly 38% compared to the same period last year. However, a subsequent issue arose as the facilities couldn’t keep up with the surge, making toilet access a major problem, leading to a viral trend “Tourists in Altay are about to burst their bladders.”
Oliver Wyman predicts that the current preference of Chinese consumers for domestic travel indicates that outbound tourism may not fully recover to 2019 levels until the end of 2025, which is half a year later than previous forecasts.
In contrast, due to the soaring US dollar exchange rate, outbound travel has become more affordable for American tourists. In the past two years, there has been a historical record high in the number of Americans applying for passports for overseas travel. A report by Skyscanner stated that 85% of American travelers plan to maintain or increase their international travel frequency this year compared to 2023.