China Tourism and Hospitality Market

The China Tourism and Hospitality Market is worth USD 406 billion in 2025. The estimate covers monetized accommodation, travel services, attractions, destination food and beverage, local transfers and related operator revenue within mainland China, while excluding outbound tourism spend and avoiding double counting of general retail and standalone intercity transport. Demand is supported by 6.52 billion domestic trips, 154.5 million inbound visits and a broad base of hotels, agencies and attractions. The market has recovered materially from pandemic disruption, but current value growth is slower than trip growth because average spend per journey remains under pressure.

The market is forecast to reach USD 554 billion by 2031, representing a 5.31% CAGR from 2026 to 2031. Growth will be more normalized than the 2020-2025 recovery period and will be driven by domestic trip frequency, inbound visa facilitation, lower-tier destination development and greater chain penetration in accommodation. Trip volumes are expected to rise toward 8.62 billion by 2031, while revenue per trip recovers gradually. The base case assumes stable consumer confidence, continued policy support, modest hotel yield improvement and sustained expansion of digital booking and asset-light hotel models.

Profit pools are shifting toward branded midscale accommodation, mobile-led distribution, inbound premium services and attraction-linked ancillary spending. Independent hotels face weaker pricing power, while franchise and management-contract models can generate fee income with lower capital exposure. OTAs and super-apps retain strong discovery advantages, but direct hotel channels can improve economics through loyalty and lower acquisition cost. Inbound travelers provide higher potential spend across accommodation, guided experiences and local transport, while lower-tier domestic markets create volume opportunities for efficient budget and midscale formats. The best economics will sit with platforms and operators that control customer data and attach multiple services to each trip.

The most important operating risk is yield compression caused by supply growth, price transparency and a shift toward shorter, lower-ticket trips. Star-rated hotel occupancy fell to 46.8% in 2025 and average room rates declined to RMB 360.2 per night. At the same time, domestic trip growth exceeded spending growth, reducing average monetization per journey. This combination can weaken property-level cash flow even when traveler volumes rise. Operators also face fragmented service standards across tens of thousands of agencies and attractions, increasing compliance, distribution and quality-control costs.

China is the largest market among the selected Asian peers, with normalized 2025 operator revenue materially above Japan, Indonesia, South Korea and Thailand. Its competitive advantage comes from the scale of domestic travel, a large network of attractions and rapidly improving inbound access. China grows more quickly than Japan and South Korea in the base forecast, although Indonesia and Thailand have higher percentage growth from smaller revenue bases. The country's challenge is not demand scale but converting travel frequency into sustainable per-trip revenue while managing hotel oversupply and fragmented service quality.

Domestic mobility will remain the largest demand driver, but inbound facilitation will have the strongest incremental impact on mix and margins. Domestic trips provide the recurring volume base for hotels, attractions and agencies, especially as rural and lower-tier participation expands. Inbound demand adds higher-value accommodation, guided services, local transport and cultural experiences. Visa-free access, 240-hour transit and improved payment convenience reduce conversion friction. The strongest operators will connect domestic scale with inbound-ready service, using multilingual content, integrated payment, dynamic packaging and loyalty programs to increase spend per traveler.