China’s tourism to grow faster than its GDP as people spend less on property, more on travel, Tongcheng executive says

People in China have switched from buying big-ticket items like flats and cars to experiential consumption, says Tongcheng Travel CFO Fan Lei

The Hong Kong-listed online travel agency posted a revenue of 2.8 billion yuan for the June quarter, up 80 per cent from the same period in 2019

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Visitors at Jingshan Park near the Forbidden City in Beijing. Photo: Bloomberg

Published: 8:00pm, 24 Aug 2023Updated: 8:45pm, 24 Aug 2023

China’s tourism industry will grow faster on average than the country’s gross domestic product (GDP) in the next decade, according to Fan Lei, chief financial officer of online agency Tongcheng Travel.

While the Chinese economy has slowed down and consumption in education, property and cars has weakened, people are still spending money – but in areas different from before, Fan said in interview with the South China Morning Post on Thursday.

“One of the most important [consumption] trends is that big-ticket and mid-market purchases are becoming more limited,” Fan said. “People are switching their spending habits from buying expensive products to paying for experience-type consumption.”

China’s economy grew by a worse-than-expected 6.3 per cent in the second quarter, largely buoyed by the low base induced by last year’s Covid-19 lockdowns. Property investments fell by 8.5 per cent year on year from January to July, after dropping 7.9 per cent in the first six months.

Visitors at Nanluoguxiang, a tourist hot spot in Beijing. Photo: Bloomberg

But as China’s consumer prices tipped into deflationary territory in July, the tourism industry, hit hard during the pandemic, has emerged as a rare bright spot since the country reopened its border in December.

The Spring Festival in January, a traditional family holiday in China, sparked a travel resurgence, according to a report by the China Tourism Academy in February. For the whole year, domestic tourist traffic is expected to reach an estimated 4.5 billion, roughly 76 per cent of the levels in 2019, the report said.