In Depth: China’s Travelers Return, but Their Spending Stays Home

A record-breaking number of travelers crowded China’s transportation hubs during the summer of 2025, but this high volume masked an underlying economic challenge: while foot traffic surged, spending lagged behind pre-pandemic levels [para. 1]. In July and August, China’s railways logged 943 million journeys—up 4.7% year-on-year—while airports saw 147 million flights, reaching a single-day record of nearly 2.6 million on August 15 [para. 2]. Despite these robust numbers, domestic airfare and hotel rates kept declining, and spending per traveler dropped [para. 3]. International travel presented a mixed outlook, with many Chinese tourists favoring nearby, affordable Asian destinations, though long-haul trips to Europe showed revival [para. 4]. These patterns underscore Beijing’s ongoing struggle to stimulate domestic demand and economic recovery. Travelers, now more value-driven, prioritize meaningful experiences over extravagance—a trend highlighted by the widespread popularity of concerts and unique travel experiences [para. 5].

The disconnect between high traveler volume and lower consumer spending is especially pronounced in air travel [para. 6]. The average domestic airfare for one-way flights dropped to around 900 yuan ($126), 5% lower than in 2024, with international fares down 15% to approximately 1,500 yuan [para. 8]. Compared to 2019, domestic airfares were 8.6% lower [para. 9]. This downward pressure is attributed to an oversupply of seats as airlines anticipated a post-pandemic travel boom that did not fully materialize, coupled with competition from China’s expanding high-speed rail network [para. 10]. The hotel industry faces similar challenges. Only a single week in mid-August saw a year-on-year rise in hotel revenue per room, while rates in major cities like Beijing, Shenzhen, and Guangzhou declined, and mid-to-high-end Shanghai hotels saw stable prices [para. 12]. Aggressive expansion by both domestic and chain hotels has saturated the market, intensifying price competition [para. 15]. Budget hotels have also stepped up, mimicking upscale experiences at discounted prices, making high premiums rare during the peak travel season [para. 17][para. 18].

University students have become a pivotal demographic for the travel sector [para. 21]. Bookings for flights by 18-22-year-olds grew by over 10%, with international bookings surging 42% [para. 22]. Students are willing to spend on unique accommodations and experiences, such as villa stays and camping, with bookings near scenic spots and concert venues doubling or increasing manyfold [para. 23][para. 25]. The “concert economy” has emerged as a major tourism driver, with citywide spikes in hotel orders and cultural consumption linked to major events [para. 27]. Local governments have taken note, actively pursuing concert events that deliver substantial economic returns [para. 29].

For outbound travel, nearby Asian countries—Japan, Thailand, South Korea, Hong Kong, and Malaysia—remained top choices [para. 36]. Travel to Japan was especially strong: round-trip flights in August surpassed 2019 levels, and nearly 1 million Chinese visitors arrived in Japan in July, a 25.5% year-on-year jump [para. 38][para. 39]. Malaysia benefited from a new mutual visa-exemption, but Thailand saw a major decline in bookings, due in part to safety concerns sparked by high-profile incidents [para. 41][para. 43][para. 45]. Long-haul travel to Europe rebounded, with visa applications to Italy, Norway, and Germany up over 80% [para. 49]. However, travel to North America remained limited, with U.S. direct flight capacity just 26.2% of 2019 levels due to government restrictions [para. 52].

Inbound tourism also improved. China’s rail system hosted a 23.9% year-on-year rise in foreign passengers during the summer, with visitors increasingly seeking non-traditional destinations far from major cities [para. 54][para. 57]. This diversification is driven by repeat and ethnic Chinese tourists in search of novel experiences [para. 59].