The rise of small-town tourism and AI companions

During the recent May holidays, Chinese tourists took full advantage of the five-day break by creating a buzz on Weibo (China’s Twitter equivalent), with hashtags as #100 million people visited each city# (据说每个城市都来了1亿人).

According to the Ministry of Culture and Tourism data center, domestic tourism reached 295 million people, an increase of 28.2% compared to the same period in 2019. Ctrip data indicated that Chinese tourists traveled to nearly 200 countries around the world, with Hong Kong, Macau, Southeast Asia, Japan, South Korea and other nearby countries being popular destinations.

What does the consumption pattern observed during this May holiday reveal about the economic situation in China? Let’s delve into it together.

Small towns

Small town tourism suddenly gained popularity

In the past two years, Zibo barbecue, Tianshui Malatang and similar offerings have become distinctive tourism culture brands. This phenomenon is driven by companies, amplified by self-media and followed by consumers, making it a widespread and accessible tourism experience for the majority.

While the economy has yet to fully recover to pre-pandemic levels, this year’s May holidays underline a notable trend towards tourism to lesser-known destinations. The hashtag #nichecities suddenly became popular# (小众城市突然爆红) on Weibo, 210 million views. Netizens have discussed “affordable alternatives” (平替), comparing Yanji in Jilin to South Korea, Jinghong and Mangshi in Yunnan to Southeast Asia, and Zhejiang’s Qi Shi Array to Britain’s Stonehenge, among others.

LY.COM’s ‘2024 May Day Holiday Tourism Consumption Report’ highlights an increase in hotel and scenic spot bookings in small towns below the third tier in the northeast and west regions, with an increase of more than 100% year-on-year. This reflects tourists’ growing interest in non-traditional destinations such as Liuzhou in Guangxi, Zibo in Shandong and Tianshui in Gansu, as well as rural towns such as Xijiang Thousand Households Miaozhai in Guizhou, Pingyao Ancient Town in Shanxi, Hongcun in Anhui and Wuyuan. in Jiangxi.

On social media platforms such as Xiaohongshu (RED), many young people are eager to explore provinces and even ‘visit China’s Top 100 Provinces’ as a new approach to May Day travel. They exchange recommendations on hidden gems such as Anji County with its burgeoning coffee culture and the recent Dalu Music Festival, which attracts city dwellers looking for a slice of rural tranquility and contemporary lifestyle experiences.

Moreover, tourism infrastructure in small towns is increasing. Since December 2023, 127 new 4A-level scenic spots have been constructed in ten provincial-level administrative regions, of which 65% are in provincial-level counties and cities.

In times of economic downturn, people try to maintain their lifestyle with lower expenses. Companies that respond to this demand will thrive in the challenging economic landscape.

Global travel

Short-haul regions attract Chinese tourists.

According to data provided by Qunar, the top 10 popular outbound travel destinations for China during the upcoming May holiday on April 24 include Hong Kong, Bangkok, Tokyo, Macau and Singapore.

Hong Kong in particular has come up with strategies to attract people Mtourists inland amid changing post-epidemic dynamics. Recognizing that shopping alone is no longer a primary draw (Hainan’s aggressive development of duty-free policies in the Free Trade Port has eroded the price advantage once associated with luxury goods and beauty products in Hong Kong), the city has shifted its focus to cultural and artistic events, as well as large-scale concerts.

For example, Hong Kong Disneyland offered “buy one, get one free” coupons in April, while Taiwanese rock band Mayday performed seven consecutive concerts during the holiday season. These efforts have positioned Hong Kong as a leading choice for outbound travel during May Day.

It is also worth mentioning Japan. As the yen hit a 34-year low against the US dollar during the holiday season, the currency became more attractive to foreign tourists. The Japan National Tourism Organization reported that more than 450,000 mainland Chinese tourists visited Japan in March, ranking third in total visitor arrivals after South Korea and Taiwan. Despite ranking third in number, Chinese tourists showed the highest purchasing power, with an average expenditure of 293,000 yen (approximately USD 1,874) per person in the first quarter of the yeartops the list of foreign tourists.

Looking back at the outbound travel trend during the May Day period, Li Feng of Fengrui Capital noted: “Short-haul countries such as Southeast Asia, Japan and South Korea remain popular, while long-haul travel is relatively moderate, probably due to the duration of the trip. of the holiday. Looking ahead to the upcoming National Day, with the resumption of international flights and streamlined passport renewal processes, we expect a revival of long-haul international travel, including destinations in Europe.”

AI companion

Young travelers are using AI to make their vacation seamless and easier.

On May 1 this year, ‘AI companion’ emerged as a new trend in travel. This includes the use of AI technology to provide personalized travel assistance services, creating tailor-made itineraries and services based on individual interests and preferences, thereby improving the user’s travel experience.

One such platform is the Ernie Bot app. During the May holidays, the app introduced functions such as “All-round guide to May attractions” and “photo straightman (直男) index evaluation”, meeting various user needs such as English communication, attraction commentary and photo translation, travel tips and photo reviews.

Data shows a significant increase in the use of travel-related smart features on the Ernie Bot app on May 1, with the number of users increasing almost twelve times. This indicates a growing tendency among young people to improve their travel experiences using AI technology. Ernie Bot App relies on Baidu’s self-developed Wenxin Big Model 4.0 technology and has a user base of more than 200 million as of April this year.

By combining ‘AI Companion’ with recommendations from platforms like Xiaohongshu, young travelers take an intelligent and mutually supportive approach to make their May Day holiday seamless and easier.

Growing tourism in small towns reflects today’s traveler demographic’s search for budget-friendly travel, in addition to the desire to avoid the crowds. Short international trips have driven growth in tourism to neighboring countries, and the performance of long international trips can be expected in the next summer holidays. Young people are using ‘AI companion’ to enrich their travel adventures, and any technology or company adept at understanding user needs and meeting them quickly will help differentiate themselves for future May Day holidays.