▲Activity Recommendation (Click the image above for details) ：

Market recovery drives industry investment rebound,

Overall optimistic market investment expectations

(1) Market acceleration recovery boosts tourism investment confidence

Market recovery boosts industry confidence, and market players' investment expectations are generally optimistic. With the accelerated recovery of the domestic tourism market, the tourism supply chain has been steadily repaired, and the recovery of tourism consumer confidence and business expectations has stabilized the investment confidence in the tourism industry. The investment and operation of tourism enterprises are generally improving, and the investment expectations for 2024 are generally optimistic. The report constructs a tourism industry investment index system from three dimensions: investment confidence, investment willingness, and investment returns. After comprehensive calculation, the tourism industry investment index is 129.8, and the industry investment shows a warming expansion trend.

Table 1 Framework of Tourism Industry Investment Index

Special survey data shows that the confidence index of surveyed enterprises in the overall culture and tourism industry in the first half of 2024 is 151.5, a month-on-month increase of 2.5%, and the confidence index in the culture and tourism investment field is 144.1, a month-on-month increase of 3.7%. Enterprises are optimistic about both the overall tourism industry and the investment field. In 2023, 80.5% of tourism investment/operating enterprises carried out investment activities, and 53.6% of amusement equipment and service providers carried out investment activities. The enhanced confidence of entrepreneurs can attract more investors to the tourism investment market and promote the expansion of investment fields and the increase of investment scale. Entering 2024, Fosun Tourism continued to increase the new capacity of Club Med. It is expected that by 2026, the annual capacity will increase by more than 19% year-on-year compared with 2023 through new openings and renovations. Beijing is actively planning and promoting the second phase of the Universal Theme Park. Leading hotel groups such as Shoulu and Huazhu are actively deploying mid-to-high-end hotels with both light asset management and heavy asset investment. Investment in the culture and tourism industry is steadily advancing in the process of optimization and consolidation.

The investment expectations of tourism investment/operation enterprises are relatively optimistic, while amusement equipment and service providers are cautiously optimistic about investment. Special survey data shows that the proportion of tourism investment/operation enterprises that are optimistic about the overall future industry is 81.1%, and the proportion that is optimistic about the investment field is 76.2%, and the expectations and confidence in tourism investment are at a high level. In contrast, 60% of amusement equipment and service providers are optimistic about the overall development of the tourism industry and the investment field, showing a cautiously optimistic attitude.

Figure 1 Comparison of Expectations between Tourism Investment/Operation Enterprises and Amusement Equipment and Service Providers

(2) Tourism investment is expected to usher in rational growth

More than 60% of surveyed enterprises have the willingness to expand investment, and tourism investment/operation enterprises have a stronger investment willingness than amusement equipment and service providers. In the first quarter of 2024, indicators such as the number of domestic tourists and per capita spending during the New Year's Day and Spring Festival holidays have fully recovered, and the overall expectation of the tourism economy in the second quarter is optimistic. Under the booming tourism situation, tourism consumption has ushered in favorable conditions, and industry investment has rebounded. Special survey data shows that 77.3% of enterprises are currently investing in tourism, among which the proportion of surveyed enterprises that increase investment, remain unchanged, and reduce investment are 76.3%, 21.4%, and 3.3%, respectively. From the perspective of enterprise types, 60.8% of amusement equipment and service providers said they would expand tourism investment in the future, and 77.7% of tourism investment/operation enterprises said they would expand tourism investment in the future.

Figure 2 Comparison of Investment Willingness between Tourism Investment/Operation Enterprises and Amusement Equipment and Service Providers

Theme park/amusement park construction, amusement equipment manufacturing, tourism destination operation, cultural creativity, and technology are the main directions for investment in the amusement industry. Focusing on the amusement field, special survey data shows that the preferred investment areas for amusement equipment/service providers are equipment and facilities (26.8%), theme parks/amusement parks (23.3%), cultural creativity (19.6%), and technology (9.3%), while the preferred investment areas for tourism investment and operation enterprises are theme park/amusement park construction (38.5%), amusement equipment and facilities (18.2%), tourism destination operation (16.3%), and cultural creative services (9.7%). Amusement equipment/service providers pay more attention to investment in the technology field, while tourism investment/operation enterprises pay more attention to investment in tourism destination operation.

Figure 3 Main Investment Areas of Tourism Investment/Operation Enterprises and Amusement Equipment and Service Providers

(3) The industry expects more good projects and a favorable environment

The investment returns in the tourism industry have improved, and accelerating investment recovery requires a combination of stock optimization and incremental improvement. Special survey data shows that 51.8% of surveyed enterprises said that the return on investment in the culture and tourism field increased in 2023, and 36.7% of surveyed enterprises said that the return on investment remained stable. At the same time, the extended investment recovery period in the tourism industry is worth noting. The overall industry data shows that 50.0% of surveyed enterprises said that the investment recovery period has been extended, and only 11.3% of enterprises said that the investment recovery period has been shortened. Operating problems of existing projects may lead to an increase in the investment recovery period, and investment expansion will extend the overall investment recovery period. The tourism investment field faces the dual goals of stock optimization and incremental improvement.

Figure 4 Comparison of Investment Payback Period of Tourism Enterprises

The investment market anticipates more high-quality products and projects, with a more urgent need for low-risk, short-cycle investments. Special research data shows that the lack of good products/projects, excessively long investment recovery periods, high risks, limited profit margins, and external factors such as policies are the main bottlenecks restricting the development of investment in the tourism industry. Over the past year, the tourism industry has successfully repaired its industrial chain. To meet the rapidly releasing and increasingly rational tourism and leisure demands in the future, the market's desire for innovative products and projects is even stronger. Currently, single product combinations and superficial imitation of successful cases can no longer meet the rapidly iterating and increasingly discerning consumer demands. The tourism industry needs to rely on independent research and development to seek innovative projects with highlights. With good products and projects, the industry investment can provide more considerable return on investment assessments and present more convincing profit models, thereby obtaining more favorable financing plans, reducing financing and marketing costs, and ultimately solving problems such as homogeneous price wars, limited profit margins, lack of financing support, and long investment recovery periods.

Figure 5 Feedback from tourism enterprises on investment difficulties and bottlenecks

Amusement Equipment & Service Procurement Market Steadily Expands

This report constructs a tourism equipment & service procurement index by referring to the Purchasing Managers' Index (PMI) index system. Five indices are selected and weighted respectively: orders (30%), production (25%), employment (20%), delivery (15%), and inventory (10%). Referring to the PMI standard, the tourism equipment procurement index also uses 50% as the prosperity and decline dividing line. Through month-on-month calculation, if it is above 50%, it indicates industry expansion; below 50% indicates a decline in manufacturing procurement; and close to 40% indicates signs of recession.

(1) Amusement Equipment Procurement Index Achieves Month-on-Month Growth

In the second half of 2023, the amusement equipment/service procurement index reached 60.8%, a month-on-month increase of 9.5%, with the recovery of the tourism economy driving the expansion of the tourism equipment and equipment procurement market. The continuous release of domestic residents' travel demand, with family and children's leisure becoming an important part of the travel market, has led to domestic theme parks, ice and snow parks, carnivals/amusement parks, and street block commercial areas becoming important scenes for parent-child entertainment. The construction and operation of cultural and tourism leisure and entertainment spaces centered around parent-child entertainment has become a market hotspot. In 2023, Hong Kong Disneyland's "Frozen World" and Shanghai Disneyland Resort's "Zootopia" became leaders in the theme park tourism boom. In 2024, Sanya will welcome the world's first Hello Kitty theme park resort, and Shenzhen and Shanghai Legoland will open in 2024 and 2025 respectively. The enthusiasm for the amusement industry and investment have driven the upward trend of tourism equipment procurement, and the market demand for amusement equipment, related scenic area management services, and digital entertainment equipment is increasing.

40% of amusement equipment companies have seen increases in orders, output, and employees, accumulating strength for the future prosperity of the amusement industry. Special research data shows that in the second half of 2023, more than 40% of amusement equipment and service companies increased their order volume, output, and workforce size. At the same time, 60% of companies maintained stable product inventory levels and delivery cycles, and 14.5% of companies shortened their delivery cycles. At the beginning of 2024, several amusement equipment manufacturers in Huojia County, Xinxiang City, Henan Province, experienced a peak period of orders, receiving orders for facility equipment from various amusement parks across the country. The increased market demand for tourism equipment, facilities, and operational services has promoted the profit growth, product research and development, and service improvement of amusement equipment manufacturing/service enterprises, contributing to the optimization of the industry structure and accumulating strength for the future high-quality supply of the amusement industry.

(2) Amusement Equipment Procurement, Investment, and International Cooperation Form a Virtuous Cycle

Amusement facilities and equipment and digital technology products are both major investment areas and popular products in the procurement market. Data shows that investment in the tourism industry covers key areas such as theme park/amusement park construction, tourism equipment, technology, tourism destination operation, and cultural creativity. With the support of tourism investment, the market demand for digital technology entertainment equipment (procurement index 61.5%) and amusement facilities and equipment (procurement index 60.1%) has increased. The prosperous and positive tourism market has boosted investor confidence in the amusement industry, and infrastructure investment has driven the growth of tourism equipment procurement. At the same time, the market's preference for diversified amusement equipment and services has attracted more investment.

International brand cooperation among amusement equipment companies is actively advancing. Data shows that 27.9% of amusement equipment/service suppliers have cooperated with foreign brands, with popular keywords for cooperative brands including Disney, Universal Studios, Merlin Entertainments, Siemens, and Panasonic. As the only amusement facility manufacturing company listed on the A-share market, Jinma Amusement has begun to enter the ranks of suppliers for theme park giants such as Universal Studios and Disney. Henan Anxin Amusement Equipment has achieved product diversification and iterative upgrades, and its projects have been exported to more than 80 countries and regions, including the United States, Canada, Australia, and Germany. Domestic amusement equipment suppliers are actively investing in product research and development, providing matching amusement equipment and services for domestic and foreign theme parks and tourism resorts. International cooperation has provided strong support for increased orders and investment attraction for equipment companies.

(3) The Matching Degree of Supply and Demand for Amusement Equipment and Services Still Needs Improvement

The current domestic supply level of tourism equipment and services still has a gap with market demand. Special research data shows that only 15.3% of surveyed companies believe that existing amusement equipment and services fully meet market demand, while about 73.2% of surveyed companies believe that the level of satisfaction is "relatively satisfied" or "generally satisfied." The main reasons for the inability to meet demand include insufficient innovative research and development (35.4%), services and operations that need improvement (27.1%), technology that needs to be broken through (23.0%), and unreasonable pricing (14.3%).

Content innovation, service improvement, and technological improvement are key areas for future efforts. Currently, the domestic supply of tourism equipment and services is still in a stage of rapid development. Combining the problems reflected by enterprises in the supply of equipment manufacturing and services, tourism enterprises in the future still need to continue to exert efforts in the development of unique tourism products/projects, high-quality service and maintenance, cutting-edge technological support, and reasonable price design. At the same time, responding to the industry's appeal for policy support, it is recommended to increase policy support, resource input, and financial assistance for the supply side of tourism equipment and services in the future.

China Tourism Association Activity Cooperation: 18810272514