Dai Bin | Comprehensive and developmental interpretation of tourism economy

Recently, Dean Dai Bin of our college was invited to accept an exclusive interview with China Tourism News, interpreting the tourism economy in a comprehensive and developmental way. The full text was published on the front page of China Tourism News on November 26, 2024. The full text is shared as follows:

Since the beginning of this year, my country's tourism consumption enthusiasm has been high. In the first three quarters, the number of domestic tourists increased by 15.3% year-on-year, and the total travel expenditure of domestic tourists increased by 17.9% year-on-year. Tourism consumption has become a standard for the public's good life. At the same time, tourism consumption has also shown some new changes and new trends. Dai Bin, president of the China Tourism Research Institute, recently accepted an exclusive interview with a reporter from China Tourism News, analyzing the deep-seated logic of changes in the tourism market from multiple angles.

Reporter: Since the beginning of this year, my country's domestic tourism market has continued to maintain a prosperous development trend, with the number of domestic tourists and total travel expenses rising steadily. However, some industry insiders believe that the growth rate of per capita domestic tourism consumption has slowed down or even declined, and that the domestic tourism market has a phenomenon of "prospering population but not financial resources" or even "consumption downgrade". What do you think about this?

Dai Bin: Judging from the tourism data of major holidays that have passed in 2024, the number of domestic tourists and total travel expenditure have exceeded the same period in 2019. For example, during the National Day holiday, 765 million domestic tourists traveled, an increase of 10.2% over the same period in 2019; the total travel expenditure was 700.817 billion yuan, an increase of 7.9% over the same period in 2019. At the same time, according to preliminary statistics, in the first half of this year, inbound tourism and outbound tourism have recovered to 80% to 90% of the same period in 2019.

The tourism economy is entering a new stage of normal development and is moving from a rapid recovery to a new cycle of prosperity and development. This is our overall judgment. However, we must also pay attention to some new changes in tourism consumption behavior and tourism industry operations.

First, the number of tourists making a second trip or traveling during off-peak hours has increased. For example, a survey of the tourism market during this year’s National Day holiday showed that nearly half of the people made a second trip.

Second, the way of traveling has changed. The number of self-driving trips is increasing, which means that tourism consumption has begun to "move forward" and more pre-trip consumption has occurred. For example, before a self-driving trip, the car needs to be filled with gas and supplies for the trip need to be purchased. According to monitoring data, pre-trip consumption has accounted for more than 15% of tourism consumption, and this part of the expenditure is not currently included in tourism statistics.

Third, the consumption of living and traveling has increased. For example, in Sanya, some tourists live in their own properties instead of hotels, and do not consume accommodation in the traditional sense; some go to local vegetable markets, night markets, and entertainment venues to consume, integrating into the lives of local residents, and this part of consumption is also real.

Fourth, new types of tourism consumption continue to emerge. The extension of the tourism consumption chain and the emergence of new tourism consumption have led to a huge impact and challenge to our traditional understanding of tourism consumption. Today's tourism consumption is no longer just consumption completed through the services provided by tourism companies, or in other words, it is no longer just consumption completed through the services provided by traditional tourism companies.

Fifth, tourists are increasingly integrated into the daily leisure and living space of local residents. "Three zones and one circle" (tourist attractions, resorts, blocks, and business districts) and "three halls and one station" (libraries, cultural centers, museums, and cultural stations) have become spaces shared by hosts and guests. Today, it is the tourists who define the tourism industry, not the tourism industry that defines the tourists; tourists not only visit scenic spots at tourist destinations, but also go to theaters, vegetable markets, and the living spaces of local residents. More and more cities and villages have become beautiful living spaces shared by hosts and guests, and attracting people from near and far.

Sixth, the improvement of public services at tourist destinations and the innovation of government management. More and more scenic spots, especially those in urban areas, have begun to reduce prices or become free, becoming open scenic spots without obvious boundaries or the pressure of crowding. Some local governments have also opened parking lots and government canteens to provide convenience for tourists.

In short, looking at the above changes, it is easier to explain the differences between the current tourism market's macro data and micro perceptions.

With the upgrading and development of mass tourism, we may see less of the "wave-like" and visually impactful "large passenger flow" in the past, and now tourists' tourism consumption is highly decentralized. Therefore, we must not only see the growth pressure of traditional formats, but also see the huge development opportunities brought by new formats and new technologies.

The shadow of the epidemic has dissipated, and tourists have returned, but what has returned is not the original tourism consumption model, let alone the original way of traveling. If we do not see this change, and still expect tourists to "flock" in like in the past, and continue to get a "feel" of industrial development only from travel agencies, hotels, scenic spots and other typical tourism formats in the traditional and relatively closed industrial system, some deviations may occur.

We need to realize that the development of tourism is an economic phenomenon caused by tourists' stay and local life experience. Today, the tourism industry system has become more and more open, tourists have widely entered the beautiful living space of tourist destinations, and the contribution of tourism to the entire economy and society has been widely penetrated into the economic and social development system.

If we interpret the current tourism economic development with the traditional tourism development model, it is a misunderstanding, a misunderstanding of the phenomena and laws of contemporary tourism economic development. When tourism becomes an option for urban and rural residents in their daily lives, and when tourists enter the daily life space of urban and rural residents, an era of open, shared, innovative and prosperous tourism development has arrived. Only by seeing such a big picture can we avoid drawing conclusions that are inconsistent with reality from a local and static perspective, and can we interpret some special phenomena in the tourism economy in a comprehensive and developmental way.

Reporter: Many listed tourism companies have released their financial reports for the first half of the year or the first three quarters. Some tourism companies have achieved profit growth, while others have suffered losses. What do you think of this? What do you think is the reason for the divergence in the operating performance of tourism companies?

Dai Bin: How to view this phenomenon? First of all, we need to reiterate several premises. First, enterprises are market entities. Their operating conditions or operating performance are affected by market supply and demand, as well as by multiple factors such as the enterprise's internal factor combination ability and management ability. There are many factors that can cause profit fluctuations. For example, if a property is sold, the profit will be raised immediately; if a project investment fails, the profit will drop sharply. The different development stages of enterprises will also have a great impact on profits. Sometimes it is oriented to pursue market share, sometimes it is oriented to pursue profits, and sometimes it is oriented to pursue future development. It is normal for a company's profits to fluctuate. Second, listed companies are important representative operating entities in the tourism industry, but not all operating entities. We should pay attention to a large number of small, medium and micro enterprises, among which there are both companies with declining profits and a large number of companies with substantial profit growth. Therefore, we need to look at the overall development of tourism. Third, there are narrow and broad definitions of tourism enterprises. From the perspective of international practice, such as some statistical standards of the United Nations Tourism Organization, a company with more than 50% of its profits coming from serving tourists can be regarded as a tourism enterprise. The tourism enterprises in our traditional cognition are still tourism enterprises in a narrow sense.

In short, when it comes to corporate profits, pessimists are always "right", but it is the optimistic ones who will succeed in the end.

When we are getting a "feel" of the development of tourism enterprises, we must pay attention to both traditional and innovative business formats; we must see the differentiation in performance of traditional tourism enterprises, as well as the good development trend of emerging business formats; we must see the slow recovery of income of traditional star-rated hotels, as well as the rapid development of many homestays; we must see the slowdown in the development of traditional tourist vehicle and ship companies, as well as the growth of online car-hailing platforms, shared bicycle (electric car) platforms, and car rental platforms.

During the National Day holiday this year, data from Didi, Hello, and Shenzhou, which we focused on monitoring, showed that car rental costs were rising sharply. Looking at tourism performances, whether it is the "Disappearing Pharaoh" exhibition in Shanghai or the "Monet and His Friends" exhibition at the Dewey Center in Beijing, the ticket prices are more expensive than movie tickets, but they are very popular among young people. "Entertainment", one of the six elements of tourism, has been dispersed from tourism performances in the past to the daily entertainment of local residents. When tourists come to Suzhou, three or five friends listen to a Pingtan song. The per capita consumption is not high, but a little bit adds up, and consumption rises.

Enterprises, especially innovative enterprises, are not "risk-averse" but "risk-seekers". Many enterprises will experience profit fluctuations in the process of development, but these fluctuations do not represent the overall situation of the industry. Companies such as Home Inn, 7 Days and Didi have also experienced profit fluctuations and even losses, but are still favored by investors. According to statistics from the Ministry of Culture and Tourism, as of December 31, 2019, the total number of travel agencies in the country was 38,943; as of December 31, 2023, the total number of travel agencies in the country was 56,275. The substantial increase in the number of travel agencies shows that a large amount of investment is entering the tourism field, which shows the development trend and prospects of the industry. Therefore, when we get the "feeling" of the development of tourism enterprises, we must look at it comprehensively and systematically, and look at it from the perspective of the development trend of tourism enterprises and the tourism industry in a broad sense.

Reporter: In recent years, my country has actively strengthened the promotion of inbound tourism and introduced policies and measures to facilitate inbound tourism. The inbound tourism market has continued to recover, and "China Travel" has dominated overseas social media. According to the State Council Information Office press conference, in the first three quarters of this year, the number of inbound tourists is expected to reach 95 million, a year-on-year increase of 55.4%, recovering to 93.4% of the same period in 2019. However, some industry insiders believe that compared with the domestic tourism market, the recovery of inbound tourism is not as expected. What do you think about this?

Dai Bin: Our overall judgment on the development of inbound tourism this year is that it will grow beyond expectations. We expect that by the end of this year, the inbound tourism market for foreigners will be close to or reach the level of 2019. There are many reasons for this.

The country's macroeconomic policies, especially the entry facilitation policies, have brought benefits. As of now, China has unilaterally exempted nearly 30 countries from visas. In addition, there are 144-hour transit visa exemptions and cruise entry visa exemptions. The cost of foreigners' inbound tourism has been reduced and the convenience has been improved, which will naturally stimulate the enthusiasm of foreign tourists to visit China.

It is becoming more and more convenient for foreign tourists to spend in China. The policy measures of large-amount credit card swiping, small-amount code scanning, and cash guarantee have been implemented. In terms of accommodation, seven departments jointly issued the "Notice on Several Measures to Facilitate Accommodation for Overseas Personnel in Serving High-Level Opening Up to the Outside World", requiring local relevant departments and network operation platforms not to restrict accommodation operators from receiving overseas personnel by using qualification requirements as a threshold, and simplifying information collection projects. At the same time, foreign language signboards and foreign language interpretation systems at tourist destinations are becoming more and more complete. All aspects are becoming more and more friendly to foreign tourists, showing a confident, calm, open and equal tourism environment.

Tourism scenes and contents have become more colorful. In the past, foreign tourists came to China to see history, culture, and magnificent mountains and rivers. Today, foreign tourists are increasingly interested in scenes that carry the Chinese dream, such as high-speed rail, airports, and CBDs. In the past, foreigners came to China mostly to buy silk, calligraphy and paintings, and antiques, but now they buy technology products such as mobile phones and drones.

The efforts of external publicity and tourism promotion have been intensified. Whether it is the promotion of the national tourism image of "Hello! China" or the continued development of the "Happy Spring Festival" activities around the world, they are gradually forming a strong synergy, making China's image overseas more positive. From the overseas public opinion we monitor, the positive comments during this year's National Day holiday reached a historical peak, and more and more foreigners look at the Chinese tourism market with an appreciative eye.

What is the most attractive thing about tourism in a place? It must be "high-quality life + sincere, kind and warm public services". The biggest difference between tourism today and the past is that tourism in the past was "visiting relatives" and just going to take a look; tourism today is "visiting friends", not only to take a look, but also to seek emotional connection. In this case, the construction of tourism scenes has changed from "providing corresponding products and services specifically for tourists" to "shared by hosts and guests, one more person means one more pair of chopsticks".

In this sense, today's inbound tourism development environment is better than ever before. We believe that as long as foreign tourists have no prejudice against China, they will definitely come to China. Whether it is online language such as "City or not City", or heartfelt praise, or rational analysis, it shows that China's tourism appeal is getting stronger and stronger.

Reporter: What are your expectations for the tourism market in the fourth quarter of this year and even the whole year? What suggestions do you have on how to promote tourism consumption growth and promote the construction of a tourism power?

Dai Bin: It is expected that the number of domestic tourists and total travel expenditure this year will be close to the 2019 level, and the number of inbound and outbound tourists will return to or approach the 2019 level. Among them, the number of foreign inbound tourists may be higher than the 2019 level. This is an overall judgment on the tourism economy for the whole year.

The tourism economic system we observe every year mainly focuses on the "seven festivals and two seasons", that is, the seven holidays in a year and the summer vacation and ice and snow seasons. This year, the tourism market in the seven holidays and summer vacation season has achieved significant growth. At present, my country is actively planning for the ice and snow season.

Judging from some leading indicators of the tourism economy in the fourth quarter that we monitored, residents' willingness to travel has reached a historical high, and tourism enthusiasm in nearly 350 cities has also reached a historical high, so we are full of confidence in the operation of the tourism economy throughout the year.

Regarding how to promote tourism consumption growth and promote the construction of a tourism power in the next step, I think: First, we must thoroughly study and implement the important instructions given by General Secretary Xi Jinping on tourism work, fully implement the spirit of the National Tourism Development Conference, and promote the steady and long-term high-quality development of the tourism industry. Second, we must accelerate the construction of a new era tourism development theory system, work hard to study the tourism market, and work hard to systematically and in-depth study the three conditions that restrict the development of the tourism economy - disposable income, disposable time, and willingness to consume tourism. With the new era tourism development theory, we will maximize the social consensus on the development of the tourism industry and gather the development momentum of the tourism industry. Third, we must accelerate the construction of a number of world-class tourist attractions and resorts with rich cultural heritage, accelerate the construction of a number of national-level tourist leisure cities and blocks with distinctive cultural characteristics, accelerate the construction of world-class tourism enterprises, form world-class and national-level tourist routes, meet new tourism needs with high-level supply, and stimulate higher-level tourism consumption. Fourth, we must maximize the protection of the national tourism rights, actively respond to social concerns, maximize the satisfaction of the needs of the general public to spend the holidays and travel happily, and stimulate the tourism consumption needs of urban and rural residents, especially rural residents. Fifth, we need to promote greater reform and opening up, strengthen dialogue with the international community, make more Chinese voices heard in the global tourism development landscape, tell better Chinese stories, and contribute more "Chinese solutions."

Reporter | Li Zhigang, Xu Xinxin Source | China Tourism News Editor | Liu Xin Please indicate the author and source for reprinting