As 2024 comes to a close, China’s tourism industry is evolving.
From visa exemptions and the uneven recovery of Chinese and foreign airlines, to a surge in hotel renovations and the rapid rise of county-level tourism, the industry is undergoing significant transformation both at home and abroad.
Conflicts between hotels and OTAs, chaotic educational tours, high-end hotel sell-offs, and travel agency closures paint a complex picture. The industry continues to navigate uncertainty, exploring new paths amid growing competition and evolving consumer demands.
Beneath the surface, deeper currents reveal emerging trends: digital transformation in transportation, restructuring of major enterprises, and a continuous tug-of-war between old and new practices.
The question remains—where will the industry head in 2025?
TravelDaily’s key observations for the year
(1) Hotel competition intensifies
Hotel performance metrics—RevPAR, ADR, and occupancy rates—declined year-on-year. This downturn stems from a high 2023 baseline, oversupply, and severe market homogenization.
As economic pressures mount and real estate continues to flood the hotel sector, the market faces further rounds of competition and consolidation, leaving only the fittest players standing.
(2) Divergent airline recovery
On international routes connecting China to the rest of the world, domestic carriers are recovering faster than their international peers, expanding market share.
Geopolitical tensions including U.S.-China trade disputes and the Russia-Ukraine conflict add layers of complexity, delaying the full return of foreign carriers.
(3) Hotel vs. OTA – A relentless rivalry
Following summer, hotel room rates and occupancy fell, while OTAs posted strong growth-highlighting the ongoing tension between the two.
Despite their interdependence, the battle for direct bookings persists, reinforcing the need for balanced competition.
(4)Surge in hotel renovations
Aging properties-many over a decade old-are driving a renovation boom. However, simple hardware upgrades no longer suffice. The focus is shifting to operational improvements and innovative business models to meet market demands.
(5)Expanding visa-free access boosts inbound tourism
China’s expanding visa-free policies are driving inbound tourism, but questions remain about whether infrastructure and services are ready to meet this influx. Address these gaps will be critical.
(6) Corporate restructuring and layoffs
Amid economic uncertainty, major players are restructuring and downsizing to stay competitive. This trend is expected to continue into 2025 as businesses seek new models and efficiencies.
(7)High-end hotel sell-offs
The luxury hotel market is seeing increased auctions and sell-offs as traditional reliance on real estate appreciation fades. Operational performance is becoming the new cornerstone of success.
(8)Travel agency shake-up
The number of travel agencies in China nearly doubled from 33,794 in 2019 to 60,833 as of the first half of 2024, exacerbating market competition. As financial instability rises, traditional agencies must embrace digital tools and rethink their offerings to survive.
(9)Ancient towns face uncertain futures
Once-bustling ancient towns are now struggling with dwindling visitors, mirroring the fate of cultural and theme parks lacking strategic differentiation. Tourism projects rooted in outdated models risk being phased out.
Looking ahead to 2025:
The year ahead promises continued transformation as industry players adapt to new realities. Only those who innovate and evolve will thrive in this dynamic landscape.
