BOC International: Summer cultural tourism market makes steady progress, inbound tourism scale continues to expand.

BOC International released a research report stating that summer travel data showed steady progress, and looking ahead to the upcoming dual holidays, travel demand may be further unleashed. The bank maintains an outperform rating on the sector. The summer cultural tourism market overall performed steadily with positive momentum. From January to August 2026, border inspection authorities nationwide processed a cumulative 499 million inbound and outbound travelers, up 8.7% year-on-year. With the continuous optimization of visa-free policies, the recovery of inbound passenger flows is expected to further support hotel, scenic spot, transportation, and port consumption. The bank recommends paying attention to related targets in the travel chain, chain hotels, duty-free, catering, local life, exhibitions, and performing arts performance industry chains. BOC International's main views are as follows: Market Review & Industry Dynamic Data In the past two trading weeks, the Shanghai Composite Index fell 1.62% cumulatively, closing at 3888.11; the CSI 300 fell 2.15% cumulatively, closing at 4510.16; the ChiNext fell 2.99% cumulatively, closing at 3322.04; the SSE 50 Index fell 1.88% cumulatively, closing at 2868.32. The social services sector rose 0.33%, ranking 7th among the 31 primary industries under the Shenwan classification. The social services sector outperformed the CSI 300 Index by 2.48 percentage points. Among the social services sub-sectors and tourism retail sector, 2 rose. From highest to lowest, the changes were: education (+6.52%), tourism and scenic spots (+1.00%), hotels and catering (-2.22%), professional services (-3.04%), and tourism retail (-3.15%). According to Flight Manager, from August 31 to September 6, the number of passenger flights operated by civil aviation nationwide was 108,122, down 9.48% week-on-week, at 104.86% of the level in the same period of 2019. Among them, the number of international flights was 13,250, recovering to 87.91% of 2019, down about 2.92% week-on-week. Biweekly Highlights The summer cultural tourism market was steady and positive. According to Ctrip Travel's 2026 summer travel insights, the proportion of domestic long-haul travel orders rose to 32% this summer, and the proportion of cross-provincial travel exceeded 55%, with tourists devoting more time and budget to farther destinations. TONGCHENGTRAVEL's "2026 Summer Tourism Consumption Review" noted that the domestic cultural tourism market was generally steady this summer, with mass tourism consumption continuing to upgrade. According to China State Railway Group data, from July 1 to August 31, 2026, railway passenger volume totaled 954 million, up 1.2% year-on-year. According to Civil Aviation Administration of China data, during the July-August summer travel period, civil aviation nationwide transported a cumulative 151 million passengers, averaging 2.442 million per day, up 2.9% year-on-year. Overall, the summer cultural tourism market performed steadily with positive momentum. Inbound and outbound travelers grew year-on-year in the first eight months of 2026, with visa-free entry driving cross-border travel recovery. According to National Immigration Administration data, from January to August 2026, border inspection authorities nationwide processed a cumulative 499 million inbound and outbound travelers, up 8.7% year-on-year; among them, foreigners totaled 61.287 million, up 19.5% year-on-year. Among inbound foreigners, 23.72 million entered visa-free, accounting for 77.6%, up 26.8% year-on-year. Foreign inbound and outbound travelers accounted for about 12.22% of the national total. According to Fliggy's "2026 Summer Travel Express," inbound tourism performed notably well this summer, with summer inbound tourism flight orders up 197% year-on-year. With the continuous optimization of visa-free policies, the recovery of inbound passenger flows is expected to further support hotel, scenic spot, transportation, and port consumption. Investment Recommendations The summer cultural tourism travel market has concluded, with overall performance steady and rising, and the upcoming dual holidays are expected to further catalyze the release of travel demand. The bank recommends paying attention to travel chain and industry-related companies: TONGCHENGTRAVEL, Huangshan Tourism Development, LiJiang YuLong Tourism, Songcheng Performance Development, Guangzhou Lingnan Group Holdings, UTour Group, China Cyts Tours Holding, HAICHANG HLDG, Jiangsu Tianmu Lake Tourism, Changbai Mountain Tourism, etc.; chain hotel brands benefiting from the recovery of business travel and mid-to-high-end upgrades such as Shanghai Jin Jiang International Hotels, BTG Hotels, SSAW Hotels & Resorts Group, etc.; Beijing Career International, Shanghai Foreign Service Holdinggroup, FESCO Group Co., Ltd, benefiting from employment promotion policies; the recovery of the cross-border travel market is expected to promote the recovery of airport duty-free and accelerate the launch of new downtown duty-free policies, and it is recommended to pay attention to China Tourism Group Duty Free Corporation and Wangfujing Group; catering industry representatives Tongqinglou Catering Corporation and MIXUE GROUP; local life consumer time-honored brand Shanghai Yuyuan Tourist Mart; exhibition brands benefiting from business recovery such as Zhejiang Meorient Commerce & Exhibition Inc. and DLG Exhibitions & Events Corporation; performing arts performance industry chain companies Funshine Culture Group and Zhejiang Dafeng Industry. Main Risks Facing the Rating Insufficient recovery in travel demand, industry recovery falling short of expectations, and policy implementation and execution falling short of expectations.