On October 23, the 2024 China Tourism, Leisure and Entertainment Industry Development Conference, hosted by the China Association of Amusement Parks and Attractions (CAAPA), successfully opened in Zhengzhou. At the conference, Zhang Jiayi, assistant researcher at the Data Analysis Institute of the China Tourism Academy, representing the joint research team of the China Tourism Academy and the China Association of Amusement Parks and Attractions, released the "2024 First Three Quarters Research Report on Investment in the Tourism Industry and Amusement Equipment Procurement Index." The report shared the new characteristics, trends, and future development priorities in the tourism industry investment and equipment procurement sectors in the first three quarters of 2024. The core viewpoints of the report are as follows:

I. The tourism industry investment maintains a buoyant level, with the investment strategy dominated by "finding joint ventures to invest together and finding new tracks to invest first."

(I) The tourism industry investment index has fallen under pressure but remains at a buoyant level.

The investment index for the culture and tourism industry remains within the buoyant range, but market expectations are more cautious than last year. Affected by economic downturn, weakening consumer expectations, the energy conversion cycle, and the lagging effect of policies, the transformation of tourism supply from incremental expansion to stock optimization still requires a period of time. During this process, travel agencies, star-rated hotels, and tourism scenic spots, etc., offline scene operating enterprises are generally under pressure, and industry confidence and investment confidence are steadily declining. The report constructs a tourism industry investment index system from three dimensions: investment confidence, investment willingness, and investment returns. According to comprehensive calculations, in the first three quarters of 2024, the tourism industry investment index was 122.0, down 6.0% compared to 2023 (129.8), and is within the buoyant range.

 

Figure 1 Comparison of Tourism Industry Investment Index and Sub-indices in the First Three Quarters of 2023-2024

Compared with the previous year, the number of enterprises accelerating investment recovery has increased, and about 60% of enterprises have maintained or increased their return on investment. Special survey data shows that in the first three quarters of 2024, 70.1% of surveyed enterprises made investments in the tourism industry. Among them, the proportion of investment recovery periods that remained the same, shortened, and increased compared to the previous year were 45.6%, 18.2%, and 36.2%, respectively. The proportion of enterprises that shortened their investment recovery period is higher than in 2023 (11.3%). From the perspective of investment returns, the proportion of return on investment that increased, remained the same, and decreased compared to the previous year were 42.9%, 19.2%, and 37.8%, respectively. The concept of cultural and tourism leisure consumption in the demand market has changed, while the transformation of the tourism industry's supply-side momentum still requires a period of time. The pace of innovation and transformation of tourism market entities is different, and the business conditions of different sub-sectors and enterprises are uneven, resulting in a differentiated feeling, and fluctuations in investment, operation, and returns.

(II) The new supply and demand structure drives new investment directions, and joint venture investment and international cooperation contribute to quality improvement.

Industry investment dynamically adjusts with the supply and demand structure, and investment in scenic spot supporting facilities and secondary consumption scenarios and tourism destination operations has increased significantly. Special survey data shows that in the first three quarters of 2024, investment in the tourism industry mainly focused on the construction of theme parks/amusement parks, tourism destination operations, and cultural/tourism/entertainment equipment. From the fluctuation trend, the investment preference for theme park/amusement park construction is declining, while the investment preference for scenic spot supporting facilities and secondary consumption services and tourism destination operations is increasing. Focusing on the new characteristics of rational consumption, pursuit of value for money, attention to experiential and high-quality leisure content, the research and development of products for tourist destinations, interactive experience upgrades, and exploration of innovative scenarios are increasing. As more and more tourists are willing to experience local life in shopping malls, streets, and cultural venues, scenic spots/resorts are seeking to attract customers and increase revenue by accelerating product iteration and secondary consumption scenarios. The change in the supply and demand relationship drives the industry to actively respond and break through the dilemma of homogeneous competition with innovative supply.

 

Figure 2 Comparison of Tourism Investment Areas in the First Three Quarters of 2023-2024

International exploration in the tourism industry continues to advance, and multi-field joint investment seeks complementary advantages. Under the market demand environment where quality and cost-effectiveness are equally important, the market needs more high-quality, high-value-added products. Seeking breakthroughs through international cooperation has become the choice of more and more enterprises. Special survey data shows that 10.4% of tourism enterprises have cooperated with foreign related brands. From Disney, Merlin, and Puydefour international theme parks, to large amusement equipment from Canadian Whitewater, Canadian Bolan, and Italian Zamperla, to outdoor sports equipment from French Panso, to IP operations such as Ultraman and Doraemon, to digital art and theatrical performances such as Teamlab and Broadway Nederlander, domestic tourism industry has carried out extensive cooperation with international brands in project operation, equipment manufacturing, IP cooperation, scene creation, and performances, continuously improving its product quality and service operation capabilities. In order to better leverage the advantages of strong alliances, tourism enterprises in Shanghai, Sichuan, and other places have initiated investment alliances to explore joint venture investment models, such as joint ventures between scenic spots and destination operators to promote scenic spot marketing, joint investment by technology companies and tourism enterprises to create new scenarios, and the promotion of high-quality projects based on joint advantages.

(III) Investment intentions in 2025 are better than this year, and demand upgrades drive investment in new tracks.

Compared with 2024, the industry's investment intentions in 2025 are more positive. In terms of investment scale, compared with 2023, 50.1% of surveyed enterprises stated that their investment scale increased in 2024, and 16.3% of surveyed enterprises stated that they reduced their investment. For the 2025 investment plan, 60.2% of surveyed enterprises said they would increase investment, and 7.5% of enterprises said they would reduce investment.

 

Figure 3 Changes in Investment Scale in 2024 and Investment Plans for 2025

Residents' willingness to travel remains strong, and diverse needs support the industry's enthusiasm for exploring new tracks and innovations. With the continuous release of travel demand and consumption iteration, the tourism industry leverages its advantages in resources, technology, and human resources to explore new tracks and initiate more innovative attempts. In terms of innovative momentum, technology empowerment (16.0%), including artificial intelligence, virtual reality, intelligent equipment, and technology + tourism, and cultural creativity and cultural content research and development (12.8%), are the main methods. In terms of innovative business formats, parent-child research and study (9.3%), health preservation (6.4%), night-time (5.8%), and outdoor (2.6%) are the areas of focus for industry innovation. In terms of innovative content, immersive (8.1%), interactive experience (8.7%), and emotional value (3.5%) are the key words. In terms of innovative regions, urban renewal, suburban tourism, sinking markets, county-level economy, and the western market are potential areas for the future.

 

Figure 4 The Future Innovation Directions and Content Considered by Surveyed Enterprises

II. The scale of amusement equipment & service procurement is tightening, and the market urgently needs product innovation and scenario expansion.

(I) The amusement equipment procurement index has fallen, and market expectations affect industrial expansion.

In the first three quarters of 2024, the amusement equipment/services procurement index was 49.4%. Affected by the weakening investment expectations in amusement construction such as theme parks and amusement parks, the procurement scale of cultural and tourism equipment and facilities contracted compared to 2023. Compared to 55.5% in the first half of 2023 and 60.8% in the second half, the amusement equipment/services procurement index dropped to 49.4% in the first three quarters of 2024. Currently, the main service scenarios for domestic amusement equipment/services are concentrated in theme parks (38.5%), various amusement parks (37.7%), and natural scenic spots/resorts (32.7%). However, the proportion of industry investment in theme park and amusement park construction decreased from 52.2% in the first half of 2023 and 37.3% in the second half to 33.6% in the first three quarters of 2024. The investment scale in cultural and tourism leisure and entertainment spaces centered on parent-child entertainment has slightly decreased, which has, to some extent, curbed the expansion of the upstream equipment procurement market.

 

Figure 5 Main Application Scenarios of Domestic Tourism Equipment in the First Three Quarters of 2024

From the perspective of detailed indicators of the equipment procurement index, the streamlining of personnel and inventory by amusement equipment manufacturers themselves is more significant than the reduction in order volume, leading to a decrease in equipment production. From the perspective of revitalizing existing assets, current theme park and amusement park operations are focusing more on cultural content research and development, new cultural technology projects, and business model innovation. Amusement equipment and services also face increasingly urgent innovation pressure.

 

Figure 6 Amusement Equipment/Services Procurement Index and Detailed Indicators from 2023 to the First Three Quarters of 2024

(II) The fundamentals of the amusement equipment market remain stable, and innovative transformation has become an industry consensus

With the prosperity of the domestic tourism market, there is still room for growth in demand for amusement equipment, and the equipment supply capacity continues to improve, indicating a stable industry foundation. Special survey data shows that in the first three quarters of 2024, 56.7% of cultural and tourism enterprises had a demand for procuring amusement equipment and services. In the future, over 60% of enterprises stated they would consider expanding their equipment procurement scale. As the upgrade of tourism demand and supply innovation interact and advance, coupled with the release of policy effects under high-level central promotion, residents' demand for travel, especially for family parent-child activities and leisure vacations, continues to be released. Industry development and investment confidence are recovering, making the amusement equipment market promising. From the perspective of supply capacity, in the first three quarters of 2024, 59.9% of surveyed enterprises stated that tourism equipment manufacturing fully or relatively met their demands, surpassing the 2023 level. Amusement equipment manufacturing and service enterprises in various sub-sectors are rapidly improving product quality and upgrading to keep up with demand, laying a solid foundation for future content innovation, technology R&D, and business expansion.

Breaking through product homogenization and single scenarios through innovative upgrades has become an industry consensus. Special survey data shows that regarding industry development pain points such as lack of good products/projects, long investment cycles with high risks, and insufficient consumption due to economic downturn, amusement equipment manufacturing/service enterprises generally believe that innovation and R&D (34.6%), technological breakthroughs (28.0%), and improvement of operation and maintenance services (20.9%) are future industry breakthrough directions. The primary and homogenized nature of amusement facilities and equipment can no longer meet rapidly iterating demands. Developing products with better texture, richer content, focusing on cutting-edge technology, emphasizing experience, and providing emotional value, centered around the diverse needs of leisure and entertainment spaces, is the effective path to match demand and boost consumption.

(III) The industry's future requires high-quality product delivery, diversified scenario expansion, and cultivation of vertical product lines

Focus on main application scenarios for visitor equipment such as theme parks, amusement parks, and scenic/resort areas, ensuring high-quality product delivery based on differentiated needs. From different regions, leading theme parks and amusement parks in first-tier cities improve consumption through refined brand operations. In second-, third-tier, and lower-tier cities, theme parks and amusement parks represented by Fantawild effectively meet cultural and tourism leisure needs by leveraging unique cultural content and reasonable pricing. Amusement equipment manufacturing and service enterprises need to continuously optimize product design, craftsmanship, and customized services based on the differentiated characteristics of the amusement industry in various cities, strengthen independent R&D capabilities, and ensure the supply of internationally standard equipment and facilities, as well as operation and maintenance services. Combining the demands of different brand amusement venues for facility quality, service, and intellectual property protection, amusement equipment manufacturing and service enterprises must ensure that production, marketing, operation and maintenance, and intellectual property norms keep pace with the times.

Continuously explore the expanded application of amusement equipment in potential scenarios such as urban commercial districts/streets, cultural venues, hotels/B&Bs, urban parks, and highway service areas. In the new era of mass tourism, visitors increasingly enter unfamiliar living spaces, and leisure and entertainment venues need to cater to the leisure needs of both local residents and tourists. As more theme parks and amusement parks attempt to integrate with commerce, art, and culture to explore new win-win models, amusement equipment manufacturers and service providers should also pay attention to the product demands of these potential new scenarios, design and produce leisure and entertainment products suitable for commercial spaces, cultural spaces, and public spaces, and promote diversified industrial development.

Strengthen independent R&D capabilities and guide the cultivation of refined, vertical product lines. Combining the strengths of amusement equipment manufacturing and service enterprises, regional resources, and other factors, clearly define target markets and customer groups, strengthen the cultivation of vertical product lines in segmented areas, and continuously deepen and strengthen in sub-sectors, expanding product categories and service capabilities. Improve independent R&D capabilities, focus on advantageous areas, and rely on technological R&D, service operation capability enhancement, and accumulation of project experience to provide equipment products with unique or leading technologies. Develop activities and projects with distinctive brands to enhance corporate brand influence.

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