China’s inbound tourism revenue projected to reach US$470 billion by 2040: UBS
Revenue from inbound travel to China is forecast to reach US$470 billion by 2040, more than doubling its current share of the economy and helping offset weak domestic demand, according to UBS. Tourism from outside mainland China would expand to 1.5 per cent of gross domestic product (GDP) on a compound annual growth rate of 8.9 per cent from 2025, the Swiss investment bank estimated. China’s…
China's inbound tourism revenue is expected to soar to $470 billion by 2040, more than doubling its current contribution to the economy, according to projections from UBS. This surge in foreign travel is anticipated to boost China's GDP share from tourism, reaching 15% by around 2040, and represent one-fifth of the global tourism market, according to the Swiss investment bank's estimates.
UBS researchers foresee a compound annual growth rate of 8.9% for inbound tourism between 2025 and 2040, with inbound travel revenue accounting for nearly 1.5% of China's GDP on a compound annual basis. Head of China leisure and transport research at UBS, Chen Xin, highlighted the potential of inbound tourism as a growth driver amidst weak domestic demand.
China has made significant strides in liberalizing its travel policies, introducing visa-free travel to about 50 countries since 2023, including Australia, Russia, Singapore, and most of Europe. This has led to an 188% expansion in the list of visa-free countries compared to pre-2023. International flight capacity for China-bound trips could potentially increase by around 150% from 2023 to 2040, making China an attractive destination with "competitive travel costs."
The report suggests a "spending mix upgrade" among inbound tourists, with accommodation, catering, and shopping expected to constitute 78% of their spending by 2040, up from 51% in 2019. Tax-refund optimization and the presence of strong domestic brands should encourage more shopping among foreign tourists. The increasing supply of mid- to higher-end hotels and a broader calendar of international events are also expected to attract more visitors.
The report suggests that airports, hotels, premium malls, and online travel agencies are the most likely beneficiaries of the increased foreign traffic, supporting topline growth and higher per-passenger spending among international travelers compared to domestic tourists.
UBS predicts a 4.7% compound annual growth rate for the number of inbound travelers by 2040, with per-capita spending growth at 4%. Domestic travel is expected to grow at an annual rate of 4.8% from 2025 through 2040. The prolonged downturn in the Chinese property sector and a challenging labor market have put pressure on local consumption.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
