Revenue from inbound travel to China is forecast to reach US$470 billion (15.6 trillion baht) by 2040, more than doubling its current share of the economy and helping offset weak domestic demand, according to the Union Bank of Switzerland (UBS).
Tourism from outside mainland China would expand to 1.5% of gross domestic product (GDP) on a compound annual growth rate of 8.9% from 2025, the Swiss investment bank estimated.
China’s inbound travel revenue would represent 15% of the world tourism market by around 2040, said Chen Xin, head of China leisure and transport research at UBS, in a special report summary on Friday.
“Amid weak domestic demand, policymakers increasingly see inbound tourism as an incremental consumption driver,” the report said.
China, aiming to stimulate its economy, has opened visa-free travel in stages since 2023 to about 50 countries including Australia, Russia, Singapore and most of Europe.
The list of visa-free countries had expanded by 188% compared with pre-2023, UBS said. International flight capacity for China trips could increase by about 150% from last year through 2040.
China offered “competitive travel costs”, the bank said.
UBS expected a “spending mix upgrade” among inbound arrivals, with accommodation, catering and shopping at an estimated 78% of their spending by around 2040, up from 51% in 2019.
Tax-refund “optimisation” and stronger domestic brands should drive more shopping among foreign tourists, alongside a growing supply of mid- to higher-end hotels and a broader calendar of international events, UBS said.
“A key investor debate is whether the opportunity is large enough to move domestic consumption and travel-related earnings,” the report said.
“We see the clearest read-through for airports, hotels, premium malls and online travel agencies, where incremental foreign traffic can support topline growth and international travellers’ per-passenger spending is likely to be higher than that of domestic tourists.”
The report said China appeared “structurally well positioned to capture a larger share of global travel spending, supported by its rich tourism resources, competitive travel costs and improving accessibility”.
UBS forecast a 4.7% compound annual growth rate for the number of inbound travellers by 2040, with per-capita spending growth at 4%.
Domestic travel is expected to grow at 4.8% annually from 2025 through 2040, it forecast.
Local consumption has come under pressure in China from a prolonged downturn in the property sector and a tough labour market.