Our Hong Kong/China Transportation & Infrastructure Analyst
Qianlei Fan discusses how China’s travel industry is shifting
from a post-pandemic rebound to a multi-year expansion.
Read more insights from Morgan Stanley.
----- Transcript -----
Welcome to Thoughts on the Market. I’m Qianlei Fan, Morgan
Stanley’s Hong Kong / China Transportation Analyst. Today,
I'll share my thoughts on why travel is quickly emerging as one
of [the] key drivers of China's economic rebalancing.
It’s Tuesday, March the 3rd, at 2pm in Hong Kong.
I've just gotten back from my Lunar New Year trip to mainland
China. With the longest Chinese New Year break in history, people
were out roaming, exploring, laughing, and the whole country felt
like it was buzzing with people on a mission to enjoy every
minute.
According to the Ministry of Culture and Tourism, total domestic
tourism spending recorded a robust 19 percent year-on-year growth
during the holiday. In fact, China’s tourism industry isn’t just
rebounding after the pandemic. It’s entering a structurally
stronger phase, supported by policy tailwinds, demographic
shifts, and a clear pivot toward experience-driven
consumption.
By 2030, tourism revenue could reach RMB 12 trillion – equal to
roughly USD $1.7 trillion – implying 11 percent annual growth
from the mid-2020s. Over the next five years, cumulative domestic
and inbound revenue may approach RMB 50 trillion, or USD $7.2
trillion.
That scale makes travel more than a cyclical recovery – it’s
becoming a core pillar of China’s consumption-led growth. We
expect tourism’s share of GDP to rise to about 6.7 percent by
2030, up from 4.8 percent in 2024.
Domestic travel remains the backbone. People aren’t
just traveling again; they’re traveling more than before.
Policy is reinforcing demand. Extended public holidays, new
school breaks, and event-driven tourism are boosting activity. In
2025 alone, around 3,000 large-scale performances attracted more
than 43 million attendees. And spending reflects that shift.
Domestic tourism spending reached RMB 6.3 trillion in 2025, about
11 percent above pre-COVID levels. Even with slightly lower spend
per trip, more frequent travel is lifting overall revenue.
International travel is emerging as a second growth engine. By
2030, inbound travel could represent 16 percent of total tourism
revenue. In late 2025, inbound visitor growth in major cities was
up about 30–50 percent year-over-year, supported by expanded
visa-free access, which now accounts for the majority of foreign
arrivals. These visitors often stay longer and spend more.
Outbound travel is strengthening too. International air traffic
grew 22 percent in 2025, far outpacing domestic growth, and now
contributes a meaningful share of airline revenue.
Demographics and technology are reinforcing the trend. Younger
consumers prioritize travel, while older households – with
substantial savings – are beginning to spend more as services
improve. At the same time, smart hotels, virtual reality
attractions, and data-driven operations are enhancing engagement
and willingness to pay.
This isn’t just pent-up demand. It’s policy, demographics,
technology, and supply aligning at once. – with travel at
the center of China’s consumption story.
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