Travel in China

Leisure tourism continues with growth and outbound tourism posts the highest volume sales increase

The growing spending power of Chinese residents and an upgraded tourist industry structure led to steady growth of domestic and outbound tourism. In addition to steady growth of inbound tourism, outbound tourism posted the highest volume sales increase in 2017, which reflected the positive outcome of the Chinese government’s efforts to improve international cooperation and partnerships to encourage both inbound and outbound tourism.

The popularity of smartphones boosts surging growth of online travel

Leading intermediaries and direct suppliers provide various travel products and services that allow customers to search websites or mobile devices for information. The online platform also enables customers to track their order status and provides other location-based services to allow users to quickly locate a variety of nearby scenic spots. The popularity of smartphones in China also encourages users to search for travel products and services and easily complete a transaction within minutes. To enhance mobile user engagement and increase monetisation, suppliers and intermediaries offer discounted products that are exclusive to mobile users.

Competition within short-term lodging rentals intensifies

The emergence of short-term rentals in China resulted in robust growth of lodging. As a result, hotels posted slower growth and there was a further squeeze on development, especially for budget hotels. Short-term rental players such as Tujia and Xiaozhu are working on expanding their outlets at a quick pace, and are meanwhile focusing on diversifying services and customisation.

New business model emerges within intermediaries

A new business called an OTP (Online Travel Platform) was operated by Fliggy.com, a brand from Alibaba Group. This new model operates differently using an OTA (Online Travel Agency), through which travel companies and suppliers are directly connected to consumers to offer them various travel products. Traditional OTAs used to separate consumers from suppliers, resulting in consumers losing control over prices and product quality, while the OTP model enables customers to select suppliers or companies with strong reputations by referring to other customers’ reviews and comments. A number of foreign airline companies have set up their official flagship store on Fliggy.com to provide prices and increase their bargaining power.

Growing demand for travel in China over the forecast period

Domestic tourism is expected to grow steadily with strong demand for leisure services from Chinese residents. Rural tourism and short-distance city breaks are increasing in popularity among families, couples and seniors. There is a positive outlook for inbound arrivals, supported by the Chinese government’s strong efforts to build relationships with other countries. International tourism links with various countries have strengthened connections over a number of years and encouraged more inbound visitors. The range of outbound destinations has widened and has even been extended to less-popular regions, such as Belarus and Mongolia.

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