China’s travelers are back, but their spending has turned inward

A record 943 million railway trips and roughly 147 million flights over July and August highlighted how mobility has normalized. But average domestic airfares fell and international tickets also trended lower, reflecting both capacity growth and competition from high-speed rail. Hotels saw only brief spurts of pricing power, with oversupply and sharper price sensitivity keeping room rates in check even at peak season.

Shifts in traveler mix reinforced the value tilt. University students and young adults drove bookings in budget-friendly categories such as hostels, villa stays and camping, with cities tapping the “concert economy” to draw visitors and lift spending on food, transport and culture. Long-haul demand recovered selectively, Europe saw renewed interest, while travel to some Southeast Asian markets lagged as safety and cost weighed on choices. Limited U.S. flight capacity further steered demand toward short-haul trips.

Inbound and domestic leisure are still helpful to services activity, but the gap between people flows and per-capita spend keeps pressure on operators to compete on price and experience. Airlines are optimizing load factors and route mix, hotel chains are pushing differentiated offerings at mid-market price points, and destinations are packaging events to extend stays. Unless real incomes strengthen and confidence broadens, China’s tourism recovery will remain high on volume yet modest on nominal spend.