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. Qunar big data shows that, 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 profit of catering enterprises above the designated size in Beijing plummeted by 88.8%, with a profit margin as low as 0.37%; Beijing Statistics Bureau data 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, a year-on-year decrease of 2.9%. At the same time, the total profit was 180 million yuan, a year-on-year plunge of 88.8%, 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 suffered a loss of 76.51 million yuan, while other catering industries suffered a loss of 23.15 million yuan. The profit of fast food services was 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 Statistics Bureau 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, a year-on-year increase of 11.9%, 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, etc., 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, wandering around with backpacks. They are mainly those who enjoy mountain climbing, hiking, and exploring, seeking excitement. Their purpose is to understand the world and themselves through travel and to challenge their limits.

From a consumption perspective, backpackers even use tents for accommodation, 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 camping 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, a year-on-year increase of 19.0%. Among them, urban residents spent 2.31 trillion yuan, a year-on-year increase of 16.8%; rural residents spent 0.42 trillion yuan, a year-on-year increase of 32.6%.

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, a year-on-year increase of 5.9%, and the total tourism revenue reached 190.72 billion yuan, a year-on-year increase of 8.2%. Per capita tourist spending was 1,644 yuan, an increase of 44 yuan year-on-year.

Exploring diversified consumption is the key to operation

Photo tours, performing arts, cultural and creative industries, and IP co-branded marketing are all successful methods currently used to stimulate consumption. In the future, tourism operators should explore more types of consumption points, focusing on satisfying emotional value, encouraging consumers who have already traveled to have the desire to consume and actually buy valuable items.

From its rise to decline, photo tours require proper regulation to prevent malicious competition.

Data from Qichacha shows that there are 5,506 existing photo tour-related companies in China, with 2,117 registered in 2023 alone. As of now in 2024, 1,831 new photo tour-related companies have been registered in China, with 1,710 registered in the first seven months, a year-on-year increase of 78.87%. Guizhou, Yunnan, and Shanxi provinces have seen the largest number of new registrations of photo tour-related companies in the first seven months of this year, with 234, 174, and 157 respectively. The explosive growth on the supply side has instantly pushed the photo tour industry into a fiercely competitive state, making low-price competition inevitable. At the beginning of last year, the basic price range for the photo tour market was still at 399 yuan/499 yuan, but now it has plummeted to 199 yuan, and even "buy one get one free" deals for 199 yuan are common. Today, a "transfer wave" has swept through the photo tour industry on social media, spreading across major ancient cities and popular tourist cities. Phoenix Ancient City, Wujiang Village, Xishuangbanna, Dali, Zibo, Quanzhou, Dunhuang... none are exceptions.

Whether photo tours are a good consumption method can be seen from their popularity, but why did they decline so quickly? Lvwei Culture and Tourism believes that there is no problem with this consumption method itself; the root cause lies in the lack of government regulation and malicious competition.

Rebound growth in performing arts; how can tourism performances achieve "performances + tourism".

In 2019, the box office revenue of tourism performances was 7.379 billion yuan, while in the first half of 2023, it reached 7.055 billion yuan. The revenue in half a year almost reached the full-year revenue of 2019, representing a true rebound in growth for the industry.

The types of tourism performances are becoming increasingly diverse, with some taking place within scenic spots. Performances have become independent attractions. How can performances deepen interaction with scenic spots and drive mutual growth between tourism and performances?

Tourism cultural and creative products should avoid being monotonous and focus on fewer, higher-quality items.

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

After the Forbidden City's cultural and creative products became a classic, the current problem with cultural and creative products nationwide is that they are all imitating the Forbidden City, resulting in a lack of originality. Everyone pursues large and comprehensive products, ranging from stationery and ice cream to cosmetics and decorations, resulting in a wide variety of types but a lack of innovation.

IP co-branded promotion is an important method that tourism needs to actively adopt.

Experts point out that successful IP co-branding comes from the energy exchange between the brand's own cultural field and the cultural field of the co-branded IP. IP co-branding is essentially a positive or negative energy exchange between two cultural fields. IP co-branding has become a "traffic code" in the new consumption field, with major brands using IP co-branding to increase product awareness and build stronger emotional connections with consumers. Brand and IP co-branding has become a catalyst for consumption growth. There are many successful examples of IP co-branding in other fields, especially in the tea beverage industry. The tourism industry should also actively explore co-branding mechanisms.

Summary

From frisbees to camping and simmering tea, and then to the gradually cooling photo tours, every once in a while, a trendy social and lifestyle model emerges online. Tourism consumption is declining, but we must also see that the number of tourism consumers is still on the rise and remains an important part of stimulating consumption. In reality, innovative thinking is still needed, with more content + tourism forming new consumption formats.

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