Summary of the Conference Call on the China Leisure Sector Industry Overview - The report focuses on the **China Leisure Sector**, particularly the travel industry, which accounts for **10% of Chinese consumption** and is the strongest growth category in a subdued consumer spending environment [3][12]. Key Insights and Forecasts - **Domestic Travel Growth**: - Forecasted to grow at **4.8% CAGR** from 2025 to 2040, reaching **US$1,822 billion** by 2040, which is **2.3 times** the 2019 level [4][52]. - Expected to record a **7% CAGR** in domestic travel volume from 2025 to 2027 [4][45]. - Anticipated increase in domestic travel frequency to **7.9 times per year** by 2040, compared to **4.3 times** in 2019 [52][54]. - **Outbound Travel Growth**: - Projected to reach **US$628 billion** by 2040, with a **9% CAGR** from 2025 to 2040 [5][46]. - Chinese outbound travelers expected to increase to **368 million** by 2040, with a penetration rate rising from **11% in 2019 to 26%** [79][80]. - The EU and US are expected to account for over **40% of China's outbound travel spend** by 2040, up from **20% currently** [3][13]. - **Consumer Behavior Shifts**: - Travel spending is expected to shift towards **experiences** rather than physical goods, with a decline in shopping expenditure by approximately **15 percentage points** by 2040 [5][76]. - The average per-capita spending for outbound trips is projected to reach **US$1,709**, which is **104% of the 2019 level** [83]. Beneficiaries of Growth - Major beneficiaries identified include: - **Online Travel Agencies (OTAs)** - **Limited Service Hotels** - **Macau Gaming** - **Chinese Airlines** - **Japanese Retail** [6][14]. Market Dynamics and Challenges - The travel sector is correlated with the macroeconomy, suggesting potential headwinds from consumer downtrading and pricing pressures in the near term [4][51]. - Despite these challenges, lower travel costs are expected to drive domestic travel volume growth [51]. Long-term Implications - As Chinese tourists become the largest global travel cohort, their impact on global travel and consumer sectors, particularly luxury goods, hotels, airlines, and shopping malls, is expected to increase significantly [6][14]. - The report emphasizes the importance of demographic shifts, supply expansion, and increased leisure time as key drivers for the anticipated growth in both domestic and outbound travel [61][62]. Conclusion - The China Leisure Sector is poised for significant growth, driven by increasing domestic travel frequency and a robust outbound travel market. The evolving consumer preferences towards experiences and the anticipated demographic shifts will reshape the travel landscape, presenting both opportunities and challenges for stakeholders in the industry [3][5][14].