Nearly 20 practitioners from the cultural and tourism sector: Tourists have tightened their budgets during the summer vacation, making it more difficult to make profits.
At the end of July, a reporter from The Economic Observer surveyed nearly 20 cultural and tourism practitioners, who shared the same feeling: this summer vacation sees "high foot traffic but low profitability": tourists are traveling but tightening their budgets; families are going on trips but are far more price-sensitive; the overall traffic remains, but conversion has become far more difficult.
In previous summer peak seasons, Wang Yong, the person in charge of several high-star hotels in Changsha, would always receive calls from relevant departments, asking him not to raise prices too sharply. But this year his phone never rang. "There's no need for any regulatory talks. We cut the prices on our own initiative," he said.
In Zhengzhou, Dong Tao, Marketing Director of Yonghe Platinum International Hotel, a five-star property, just received the July operating report: the occupancy rate is roughly the same as last year, with a fluctuation of only one or two percentage points, but the average daily rate has dropped by 8%. The proportion of business from individual customer channels has fallen by 18 percentage points year-on-year.
In Hainan, Zhou Min, founder of Three Routes International Travel Service, did the math: the company's overall summer revenue fell 40% year-on-year, of which the Qinghai-Gansu route dropped 40%, and the Xinjiang route plummeted by 60%.
In Guilin, Guangxi, a travel agency established in November 2022 survived the pandemic, but was deregistered in April this year. 96 peer agencies were deregistered in the same period. After closing the company, its former owner Zhou Lin bought a 7-seat vehicle and switched to providing small private chartered car services.
China State Railway Group Co., Ltd. estimates that the national railway system will transport 1.01 billion passenger trips from July 1 to August 31, with an average of 16.29 million trips per day, representing a roughly 7.1% increase over the actual summer passenger flow in 2025. According to calculations by Flight Master, domestic airlines are expected to carry 142 million passengers this summer, a year-on-year decrease of 3.6%.
While visitor numbers are rising, the industry widely reports "no extra profits earned". A research report from Guojin Securities shows that in the first week of the summer travel rush (June 29 to July 5), the revenue per available room (RevPAR) of hotels across all tiers from economy to luxury nationwide declined across the board. Qunar data shows that the average pre-order price of domestic flights departing from July 1 to 7 is nearly 20% lower than the same period last year, and prices on some routes are even lower than the concurrent high-speed rail fares: on July 2, the tax-inclusive air ticket price from Beijing to Wuhan was 450 yuan, 80 yuan cheaper than the high-speed rail ticket.
At the end of July, a reporter from The Economic Observer surveyed nearly 20 cultural and tourism practitioners, including operators of hotel chains with thousands of properties, founders of high-end boutique resort clusters, general managers of leading regional car rental companies, and travel agency practitioners based in Beijing, Xinjiang, Yunnan, Zhejiang, Hainan and other regions. Apart from the frequent extreme weather events this summer, and the impact of disasters in some regions, their shared feeling is that this summer vacation sees "high foot traffic but low profitability": tourists are traveling but tightening their budgets; families are going on trips but are far more price-sensitive; the overall traffic remains, but conversion has become far more difficult.
July performance fell short of expectations
Liu Hanjie, founder of the travel lifestyle brand Xijian Xinglv, had high expectations for his resort cluster project in Chongzuo this year. "This year's revenue should be higher than last year's," he said, as the rooms have been upgraded, a petting zoo has been built, and waterfront experience facilities have been enriched. The team set the average summer room price at more than 4,000 yuan per night.
But by July, Liu Hanjie realized the situation was not optimistic. In previous years, rooms were fully booked long in advance from mid-July to mid-August, and the front desk received non-stop calls. This year, employees had to make great efforts to expand sales channels to achieve full occupancy, and empty rooms still popped up from time to time. In the end, the occupancy rate of the resort cluster declined slightly, prices failed to rise, and total revenue only stayed on par with last year's level.
Zhou Lin deregistered his travel agency in Guilin before the summer vacation even started. His agency was founded in November 2022, and during the pandemic it mostly received "pure sightseeing tour groups" with higher unit prices, rather than low-price shopping tour groups. After the peak period in 2023, the number of tour group orders declined year by year. At the beginning of this year, the profit from each conference group Zhou Lin received had dropped from 200-300 yuan per person to only dozens of yuan. He judged that the summer situation would not be optimistic, so he deregistered the company in April. He saw on the official deregistration announcement that 96 other travel agencies were deregistered in the same period.
Wang Yong manages multiple high-star hotels (referring to four-star and five-star hotels) in Changsha. In 2023, the revenue of the hotels under his management hit a historical record, with room rates reaching more than 1,000 yuan per night. This summer, the room rate for hotels of the same tier is only 500 to 600 yuan.
What he found even more abnormal was that a large-scale event for 10,000 people held at the nearby convention center brought considerable passenger flow, but the hotels failed to secure corresponding orders. In previous years, conventions of the same scale would always bring a large number of scattered individual customers to surrounding hotels, allowing the properties to reach full occupancy without low-price promotions, and even have room to raise room rates. But this year, the event organizer contacted multiple hotels in advance and uniformly capped accommodation prices within the budget, and accommodation for all attendees was pre-arranged, leaving almost no individual customers to flow to other hotels.
Yonghe Platinum International Hotel in Zhengzhou also encountered a similar situation. Dong Tao said that the proportion of conference group orders they received this year rose by 16% year-on-year, but the cost was the "package price" — the venue, catering and guest rooms were negotiated as a bundled whole, with the price of every single item declining. Dong Tao's strategy is to accept all available business first, replacing individual item profits with comprehensive overall returns.
Why take orders even with extremely thin profit margins? Because the summer vacation is critical for cultural and tourism practitioners, and almost all of them need to firmly seize this two-month window. Jin Junjie, General Manager of Xinshengbo Car Rental, a leading car rental company in Shanxi, said that summer revenue can account for 40% to 50% of the total annual revenue. "If you do well in summer, the profit for the whole year is guaranteed; if the summer performance is unsatisfactory, you have to adjust your operational structure and headcount," Zhou Min said. His company currently has 12 employees, and he is already considering further downsizing the team.
Consumer behavior has changed
Dong Tao found that family-themed parent-child rooms are no longer selling well. In previous years, a large number of parent-child rooms were booked out every day in July, but this year more and more new hotels have opened in nearby Kaifeng and Luoyang, leading to very obvious passenger flow diversion.
A homestay operator in Dali, Yunnan, has also perceived changes in customer structure — in previous years, at least 60% of guests were young people under 30, while this year the proportion of trips made by adult children traveling with elderly family members, or elderly travelers going on trips on their own, has risen significantly.
The booking lead time is also getting shorter. Jin Junjie mentioned that "post-95s" and "post-00s" now account for 80% of total orders, and the number of bookings made far in advance has decreased markedly. This short-notice decision-making pattern has brought considerable difficulties to operational scheduling.
Liu Hanjie has observed the same phenomenon. In previous years, guests booked rooms very early, but this year they only make reservations shortly before departure. He checked flight prices: a flight from Fuzhou to Nanning only costs 300 yuan, while in previous years the price was at least 800 to 900 yuan at this time of year. "Air tickets are not expensive, and rooms are not in short supply, so people are no longer willing to lock in orders in advance. They wait and see, go on the trip if the price is right, and cancel the plan if it is not."
The booking window has changed from "half a month in advance" to "within 48 hours". Wang Yong in Changsha said many people place orders in the early hours of the morning or late at night, just to grab the lowest possible prices.
Jin Junjie found that orders for new energy vehicles and extended-range electric vehicles are on the rise, with unit prices 10% to 20% higher than traditional fuel vehicles, as consumers are willing to pay for lower fuel costs and smart driving experiences. Orders and rental rates for traditional fuel vehicles, especially economy models and Buick GL8s, have both declined.
In Hainan, Zhou Min observed that the proportion of group tour bookings is falling. "People's travel structure has changed now. In the past, people joined tour groups where all food, sightseeing, accommodation and transport were fully arranged. Now many people only book hotels and tickets through travel agencies, and arrange the rest of their itinerary on their own. The form of 3 to 4 people chartering a car with dedicated full-time service is very popular, and large tour groups are rarely seen anymore." The hotel prices that travel agencies get have also seen "price inversion": the contract price agreed in the early stage is even higher than the market price close to the check-in date.
Zhou Lin has deeper personal experience of this change. In the past, conference tours included "food, accommodation, sightseeing, complimentary gifts and team building activities", but now "pick-up service from the airport is cancelled, guests check in at the hotel on their own, and no unified sightseeing tours are arranged anymore". After deregistering his company, he switched to small chartered car services. "The daily car fee is 400 yuan, and the service fee is paid at the guest's discretion, which is roughly 200 to 300 yuan," he said. He takes 7 to 8 small groups per month, earning around 10,000 yuan in revenue.
Supply surge and price "involution"
The pricing logic of travel agencies has also changed. Zhou Min said that in the past it was "perceived value pricing" — prices were set based on how much users were willing to pay, and the profit margin on top of costs was flexible. Now it is "cost-based pricing": air tickets, hotels, car and guide fees, and service fees are added up one by one, with only a tiny extra service fee on top, "so the profit margin is extremely compressed". In the past, travel agencies could earn 200 to 300 yuan per guest for conference tour groups, but now they only make dozens of yuan.
While demand is weakening, the supply of hotels and homestays continues to expand.
Data from the Maitou Institute shows that more than 3,500 new hotels with 316,000 new guest rooms were added nationwide in the first half of 2026, local brands accounting for over 90% of the total. Mid-tier hotels account for 35.1% of the total new additions, surpassing economy hotels' 27.3% for the first time and becoming the main driver of expansion. Looking at a longer time frame, the Founder Securities Institute's monitoring shows that from the first week of 2023 to the 20th week of 2026, the number of hotels with more than 15 guest rooms nationwide rose from 312,000 to 419,000, an increase of over 30%.
The supply of homestays is also expanding rapidly. Taking Dali as an example, by the end of 2025, the number of homestays in normal operation in Dali Prefecture had reached 7,007, while the number was only 2,179 in 2016, representing a net increase of 4,828 over ten years, a growth rate of over 220%.
"The market is sluggish, but supply keeps increasing," Liu Hanjie analyzed. The new supply comes from a portion of property assets being renovated into hotels. Brand operators and property owners have different priorities. Brands can choose whether to operate a property or not, but for property owners, their assets are depreciating, and if they do not renovate and convert the property into a hotel, the value of the asset will keep falling. The property owners he contacted are pushing through heavy renovations even at a loss, not focusing on making profit first, but just trying to preserve the asset valuation.
Price "involution" also comes from supply chain price inversion. Zhou Min said that hotels and air tickets in Qinghai, Gansu and Xinjiang were priced at a high level for travel agencies in the early stage based on overly optimistic market expectations. When the travel date approached, they found the market was not as good as expected, and the price for individual customers was even cheaper. But travel agencies had already signed contracts, so they had to pay at the agreed contract price for the rooms they reserved.
The head of the business analysis department of a leading hotel chain brand with thousands of outlets said that due to the impact of new supply, force majeure such as typhoons, and the diversion of leisure demand by public holidays and spring breaks in the first half of the year, the overall summer performance fell short of expectations. Hotels in non-core areas and tourist destinations are generally cutting prices to compete for customers.
But there are a few bright spots. A travel agency in Zhejiang received international outbound tour orders driven by the World Cup hype, and these high unit price orders drove it to record rising revenue and profits in July.
Fighting for August performance
Multiple practitioners said that the period from July 20 to August 20 is traditionally the peak of summer travel.
But by the end of July, the booking situation for August is still unclear. A homestay operator in Wencui Village, Dali, said the August booking rate is only around 40%. The aforementioned hotel chain with thousands of outlets also admitted that "the overall booking situation for August is still unclear, and as of now, the number of orders for the first ten days of the month is less than in previous years".
Practitioners are staring at the booking backend with no clear sense of security, but they keep taking actions actively.
Yonghe Platinum International Hotel in Zhengzhou launched all-you-can-eat buffet annual cards, quarterly cards and monthly cards during the "618" shopping festival, selling nearly 1,000 cards in total, and more than 10,000 sets of double-person buffet lunch vouchers. 200 to 300 customers come for the buffet every noon, but "the card business itself is definitely losing money". Dong Tao regards it as a way to cultivate consumer awareness — letting consumers know they can dine at a five-star hotel, so that they will consider bringing larger business to the property after they have a good dining experience.
Zhu Wei, a homestay operator in Xinjiang, has planned 22 to 30 tents next to his homestay, priced at 200 to 300 yuan. "Consumers prefer to watch the starry sky in a tent next to the snow-capped mountains rather than stay in traditional accommodation," he said. His homestay's summer pre-bookings have dropped by 20% this year, and he hopes to offer guests an extra option.
Zhou Min in Hainan has added "emotional value" to his travel products. In the past, for tidal flat sightseeing tours, they only handed out tools and explained safety notes, but now they will pre-place pufferfish in the tidal flats in advance, so that guests can "accidentally" discover them. "Both children and adults are extremely interested in the pufferfish that puff up when agitated, and we want to make sure every tour group gets this surprise experience." He has also partnered with education and training institutions to embed educational elements into travel products, using high-frequency educational interactions to drive low-frequency travel bookings.
Liu Hanjie has adjusted his August room rates back up, as he believes demand for high-end vacation experiences will pick up.
Jin Junjie has reallocated vehicles from low-demand cities to popular destinations such as Datong. "A car that rents for 100 yuan a day in Yuncheng can be rented for 150 yuan a day in Datong," he said.
Zhou Lin no longer pays much attention to the August booking market. He withdrew his 200,000-yuan security deposit from the bank, bought an electric vehicle to serve small tour groups. "Today I took three passengers and earned 800 yuan," he said. "In the past, we made profit from price differences, now we make money from service fees. In the past, a dozen travel agencies would bid for a single tour group, driving prices extremely low; now customers care more about whether your service is good and whether the itinerary is reasonable."
(As requested by the interviewees, Zhou Lin and Wang Yong are pseudonyms)