Consumption Downgrading in Tourism

First, the price of homestays has decreased, and budget hotels have become the preferred choice.

Information from several online travel platforms shows that, overall, the summer tourism market this year shows a trend of increasing volume and decreasing prices. According to Qunar's big data, so far, the average price of mid-star hotels, which were "unaffordable" last summer, has dropped by 8%. The average nightly price of international hotels has dropped by 24%.

Second, the profitability of catering has decreased.

Recently, two sets of data have sparked heated discussions among catering professionals.

One set of data shows that the profits of catering enterprises above the designated size in Beijing plummeted by 88.8%, with a profit margin as low as 0.37%. Data from the Beijing Bureau of Statistics shows that in the first half of 2024, the revenue of catering enterprises above the designated size (i.e., annual main business income of 2 million yuan or more) in Beijing was 49.21 billion yuan, down 2.9% year-on-year. At the same time, the total profit was 180 million yuan, down 88.8% year-on-year, with a profit margin as low as 0.37%. From the perspective of catering types, in the first half of the year, except for a 10% year-on-year decrease in the revenue of formal dining services in Beijing, the revenue of other catering services such as fast food services, beverage and cold drink services, catering delivery and takeaway delivery services, and other catering industries all increased. Among them, the revenue of other catering industries increased the most, reaching 9.2%. Formal dining services lost 76.51 million yuan in profit, while other catering industries lost 23.15 million yuan. Fast food services had a profit of 2.4 billion yuan, down 49.9% year-on-year, and the profit of beverage and cold drink services decreased even more significantly, decreasing by 86.1% year-on-year.

Another set of data shows that the operating profit of catering and accommodation enterprises above the designated size in Shanghai was -770 million yuan. Data from the Shanghai Bureau of Statistics shows that in the first half of 2024, the revenue of accommodation and catering enterprises above the designated size (i.e., annual main business income greater than or equal to 2 million yuan) was 75.288 billion yuan, down 2.6% year-on-year, and the operating profit was -770 million yuan.

It is worth mentioning that, in contrast to the sluggish catering revenue in first-tier cities, the catering revenue in some new first-tier, and even second- and third-tier cities, performed relatively well in the first half of the year.

For example, in Chongqing, catering revenue in the first half of this year reached 123.745 billion yuan, up 11.9% year-on-year, far exceeding the growth rate of the catering industry in first-tier cities and also outperforming the national growth rate. The year-on-year growth rate of catering consumption in new first-tier cities such as Suzhou, Wuhan, and Chengdu was all above 6% in the first half of the year.

Third, the proportion of self-guided tours has increased.

Nowadays, more and more tourists choose self-driving travel. The number of backpacker tourists is also increasing.

Consumption Downgrading and Emotional Consumption

In recent years, several forms of tourism have gradually become popular, such as city walks, backpacking, 'wei lu zhu cha' (a type of tea gathering), and camping, making us deeply feel that people have come up with many ideas to save money while pursuing a sense of atmosphere.

01 City Walkers

"City Walk" refers to a leisure way of exploring a city on foot. Compared to "special forces tourism," which involves high-intensity travel and checking off tourist attractions in a short time, it emphasizes a slower pace and an immersive city stroll. For example, in Nanchang, some people design City Walk strategies by finding food, while others string together a City Walk route by street sweeping and photography, and still others search for urban cultural memories through the distinctive place names of Nanchang, such as Yangming Road, Chuanshan Road, and Yuanming Road.

From a consumption perspective, people want to go out for a walk without going far or visiting scenic spots, so they choose some characteristic streets to stroll. City Walks focus more on taking photos and checking in and tasting local snacks.

02 Backpackers

Backpackers, derived from the word "Backpacking," refers to people who travel alone or in small groups, carrying backpacks for long-distance independent travel. Currently, it mainly refers to those who enjoy mountain climbing, hiking, and exploring, seeking excitement. The purpose is to understand the world and themselves through travel and to challenge their limits.

From a consumption perspective, backpackers even solve accommodation problems through tents, and their food, accommodation, and transportation are basically self-sufficient, representing the earliest form of budget travel.

03 Camping Boom

Camping refers to short-term outdoor residential leisure activities conducted on undeveloped land with certain natural scenery, using tents, RVs, simple wooden houses, etc. Campgrounds are generally equipped with complete living, cleaning, and recreational facilities, with certain service and safety guarantees. Camping offers a variety of recreational activities, including outdoor movies, barbecues, picnics, cycling, board games, and picking. When some people were preparing to develop camping bases, they suddenly found that consumers were directly carrying out camping activities in parks near their homes.

Tourism Consumption Remains on an Upward Trajectory

According to the Ministry of Culture and Tourism: Based on the results of the domestic tourism sample survey, in the first half of 2024, the total expenditure on domestic tourist trips was 2.73 trillion yuan, up 19.0% year-on-year. Among them, urban residents spent 2.31 trillion yuan, up 16.8% year-on-year; rural residents spent 0.42 trillion yuan, up 32.6% year-on-year.

The above lists the decline in the profit margin of catering consumption in Beijing. However, according to the Beijing Municipal Tourism Commission, the total number of tourists and total tourism revenue in the city both increased in the first half of the year. The total number of tourists reached 116 million, up 5.9% year-on-year, and the total tourism revenue reached 190.72 billion yuan, up 8.2% year-on-year. Per capita tourist spending was 1,644 yuan, an increase of 44 yuan year-on-year.

Exploring diversified consumption is the key to operation

Travel photography, performances, cultural and creative products, and IP co-branding marketing are all methods that have successfully stimulated consumption. In the future, tourism operators should explore more types of consumption points, work hard to satisfy emotional value, and make consumers who have already gone out willing to spend and genuinely purchase items that are worth their value.

From its rise to decline, travel photography needs good regulation to avoid vicious competition.

According to Qichacha data, there are currently 5,506 travel photography-related enterprises in China, with 2,117 registered in 2023 alone. As of now in 2024, 1,831 new travel photography-related enterprises have been registered domestically, of which 1,710 were registered in the first seven months, a year-on-year increase of 78.87%. Among them, Guizhou, Yunnan, and Shanxi provinces have the largest number of newly registered travel photography-related enterprises, with 234, 174, and 157 respectively in the first seven months of this year. The explosive growth on the supply side has instantly pushed the travel photography industry into a state of fierce competition, making low-price internal competition an inevitable choice. At the beginning of last year, the basic price range for travel photography packages was still 399 yuan/499 yuan, but now it has plummeted to 199 yuan, and even "buy one get one free" for 199 yuan is common. To this day, on social media, the travel photography industry has seen a "transfer wave" sweeping across major ancient towns and popular online cities. Fenghuang Ancient City, Wujiangzhai, Xishuangbanna, Dali, Zibo, Quanzhou, Dunhuang... none are an exception.

Whether travel photography is a good consumption method can be seen from its popularity, but why it declined so quickly, Luwei Cultural Tourism believes that the consumption method of travel photography itself is not the problem. The root cause lies in the lack of government regulation and vicious competition.

Performances see retaliatory growth; how can tourist performances achieve "performance + tourism"?

In 2019, the box office revenue for tourist performances was 7.379 billion yuan. In the first half of 2023, the box office revenue for tourist performances reached 7.055 billion yuan. Half-year revenue is almost catching up to the full-year revenue of 2019, truly realizing retaliatory growth in the industry.

The types of tourist performances are becoming increasingly diverse, with some being performances within scenic spots, where the performance itself has an independent attraction. How can performances deepen interaction with scenic spots to create a dual drive between tourism and performances?

Tourist cultural and creative products should avoid uniformity and be more about quality over quantity.

Cultural and creative products, also known as "cultural creative products," are a type of art derivative. They utilize the symbolic meaning, aesthetic characteristics, humanistic spirit, and cultural elements of original artworks to interpret and reconstruct them, integrating creativity into products to form a new type of cultural creative product. Cultural and creative products stimulate people's various senses, bring economic benefits, and become a booster for the development of scenic spots and urban culture.

After the Forbidden City's cultural and creative products became classics, the current problem with cultural and creative products across the country is that they mimic the Forbidden City, leading to uniformity. Everyone pursues large and comprehensive products, ranging from stationery, ice cream, and cosmetics to decorations, which are diverse in type but lack innovation.

IP co-branding promotion is an important method, and tourism needs to actively adopt it.

Experts point out that successful IP co-branding is essentially an energy exchange between the brand's own cultural magnetic field and the co-branding IP's cultural magnetic field. IP co-branding is, in fact, a positive or negative exchange of two cultural magnetic field energies. IP co-branding has become the "traffic password" in the new consumption field, with major brands leveraging IP co-branding to enhance product visibility and establish stronger emotional connections with consumers. Brand-IP co-branding has become a booster for consumption growth. There are many successful cases of IP co-branding in other fields, especially in the tea beverage sector. The tourism industry should also actively explore co-branding mechanisms.

Summary

From frisbee, to camping, to fireside tea, and then to the gradually cooling travel photography, every now and then, a trendy social and lifestyle mode emerges online. While tourism consumption is downgrading, it's important to note that the number of tourist visits is still on an upward trend, remaining a crucial part of stimulating consumption. In reality, innovative thinking is still needed, with more content + tourism to form new consumption formats.

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