中国新兴前沿 -入境旅游：正在展开的故事-China’s Emerging Frontiers-Inbound Travel The Unfolding Story

Summary of Key Points from the Conference Call Industry Overview - Industry: Inbound Travel in China - Growth Potential: Inbound visitation is projected to generate US$2-4 trillion in cumulative revenue over the next decade, despite uncertainties in domestic demand and trade frictions [1][3][4]. Core Insights - Tourism Service Exports: China's tourism service exports grew by 67% year-over-year (YoY) in the first half of 2025, significantly outpacing the 14% growth in total service exports and 6% in product exports [2][39]. - GDP Contribution: Inbound tourism receipts contributed 0.5% to China's GDP in 2024, up from 0.3% in 2023, but still below the ~1% level seen before COVID-19 [2]. - Visitor Growth Factors: Key drivers for increased inbound tourism include longer stays, a higher percentage of foreign visitors compared to those from Hong Kong and Macau, and a potential rise in business travelers [3][4]. Airline Industry Insights - Airlines' Performance: In the first half of 2025, international routes accounted for over 60% of the increase in China's air passenger turnover compared to the same period in 2024 [5][31]. - Pricing Power Challenges: Domestic demand remains depressed, delaying the expected pricing power inflection for airlines. The current high utilization rates have not translated into higher pricing elasticity [5][32][36]. - Sustainability Concerns: The aggressive expansion into international routes by Chinese airlines is viewed as unsustainable without generating profits, necessitating "anti-involution" efforts to avoid deflationary pressures [5][33][34]. Visitor Demographics and Trends - Visitor Recovery: Foreign visitation in Beijing has recovered to 90% of pre-COVID levels, with a 120% recovery for foreign tourists overall [12][61]. - Visa-Free Entries: Over 70% of foreign visitors entered China visa-free in 2Q25, a significant increase from approximately 50% before the relaxation of visa requirements [57][75]. Economic and Policy Factors - Shopping as a Growth Driver: China's potential as a shopping destination is highlighted, driven by global trade barriers and inflation pressures, making Chinese consumer goods more attractive [28][29]. - Government Initiatives: The Chinese government has implemented several policies to facilitate inbound travel, including visa relaxations, improved payment systems, and enhanced digital services for tourists [18][29][83]. Revenue Forecast Adjustments - Revenue Growth Projections: The base case for 10-year cumulative revenue remains largely unchanged, while the bull case is adjusted down by 6% compared to previous estimates [21][96]. - CAGR Expectations: A 19% compound annual growth rate (CAGR) for inbound revenue is deemed achievable, supported by factors such as increased visitor spending and longer stays [24][98]. Conclusion - Outlook: The inbound travel sector in China is positioned for significant growth, driven by favorable government policies, increased international connectivity, and evolving consumer preferences. However, challenges remain in the airline industry and overall economic conditions that could impact recovery and growth trajectories.