This report discusses the tourism industry in China and provides analysis of market trends through H2 2013 and outlook for the coming year. The report also profiles leading companies in the tourism industry—among them, China International Travel Service, China CYTS Tours, Huangshan Tourism Development, Emei Shan Tourism, Zhangjiajie Tourism Group and Lijiang Yulong Tourism. It also highlights the importance of Hong Kong as a destination of outbound tourism from China.

In 2012, domestic tourists in China numbered 2.96bn and total tourism revenues reached RMB 2.59tn. Visitor arrivals in the first eleven months of 2013 were 1.18bn. In the third quarter of 2013, the average room rate was RMB 335.4 and the average occupancy rate was 59.4%. In 2013 the China National Tourism Administration approved 30 new 5A-grade scenic areas, bringing the total number to 175. In the same year, tourism revenues for the Spring Festival and National Day Golden Week holidays were RMB 117.1bn and RMB 223.3bn, respectively.

China’s first Tourism Law was approved in April 2013 and came into effect on October 1, 2013. Foreign countries may see Chinese tourists visit larger number of attractions and potentially increase spending at these sites after the new law that bans organized shopping tours. The Civil Aviation Administration of China encourages state-owned and private carriers to establish low-cost carriers and embrace dual-brand strategies. In 2014, the authority will push the theme of smart tourism in China.

Key Points:

• Leading players whose financial performance is summarized in this report include China International Travel Service Corp. Ltd. (CITS), China CYTS Tours Holdings Co. Ltd., Huangshan Tourism Development Co. Ltd., Emei Shan Tourism Co. Ltd., Zhangjiajie Tourism Group Co. Ltd., and Lijiang Yulong Tourism Co. Ltd.

• Hong Kong is one of the most popular destinations for outbound tourism among Chinese tourists. However, overnight visitor arrival from Mainland China to Hong Kong grew at a much slower pace of 3.2% in October.

• Prices of group tours are expected to increase in the near future as a result of the new Tourism Law.

• Low-cost carriers are delivering new growth channels to the airlines and the domestic tourism industries, particularly in the western region of China.

• More cities are expected to adopt the 72-hour visa-free transit policy to open a stream of tourism revenue.

• Companies with innovative solutions that provide user-friendly and high quality experiences via mobile application will stand out from the competition.