Huatai Securities: Structural high growth in inbound tourism is breeding new opportunities.

Huatai Securities research report states that by 2025, both the scale and revenue of inbound tourism in China will surpass the levels of 2019, estimating that it will contribute close to 0.3 percentage points to GDP in 2025. During the Spring Festival period in 2026, the number of inbound tourists increased by 23.7%, surpassing pre-pandemic levels, and the hot destinations and consumption projects for inbound tourists continue to spread. Due to the higher average spending of inbound tourists, their impact on consumption this year may be even greater than in 2025. Huatai Securities believes that the expanding visa-free benefits, payment and transportation facilitation, etc. are just catalysts for the booming inbound tourism, and the fundamental reason for the deepening trend of inbound tourism lies in the richness and upgrade of Chinese tourism resources and consumer goods, as well as the ultimate "cost-effectiveness" compared to similar products overseas. In recent years, inbound tourism has been transforming towards a deeper "Becoming Chinese" experience. Core major cities remain the top choice for inbound tourists, with continued resilience in growth. Tourism destinations are also continuously diversifying and expanding, with niche destinations and themed routes experiencing high growth; there is also a rising trend towards exploring the depth of Chinese culture, which may lead to higher average spending. Consumption categories have expanded to include cultural experiences, personal care, medical services, and more.