Shanghai welcomed 5.3149 million inbound visitors in the first half of 2026, setting a new record for the period and marking a 27.8% year-on-year increase. As one of China's most prominent international gateways, the city is drawing a growing wave of overseas travelers. The key question now is whether this surge in footfall can be effectively converted into a corresponding boost in consumption.

A recent report titled "Research on the Internal Mechanisms and Growth Potential of Inbound Tourism in Promoting Consumption," released by the Institute for International Trade in Services under the Chinese Academy of International Trade and Economic Cooperation, offers an assessment of Shanghai's position. Under the framework of its model calculations, Shanghai is approaching the stage-based growth frontier under current development conditions. The next phase necessitates a greater focus on upgrading the consumption structure and enhancing conversion efficiency. Specifically, Shanghai not only needs to attract visitors but also must connect international conventions and exhibitions with commercial districts, dining, performances, and sporting events. Furthermore, through a "one journey, multiple stops" approach, it can channel gateway visitors toward the broader Yangtze River Delta region. This suggests that the growth potential of inbound tourism lies not just in bringing in more people, but also in guiding visitors deeper into the city to foster greater spending, while simultaneously boosting surrounding destinations.

Using Shanghai as a case study and expanding the perspective nationwide, the report investigates why inbound tourism is crucial, how inbound visitor flows can be converted into consumption, and where future growth space should be tapped. It constructs a five-dimensional analytical framework to identify the key links in transforming visitor flow into spending. This also provides a pathway to address a larger question: what capabilities does China still need to build to become a true powerhouse in inbound tourism?

What is China still lacking to become a true inbound tourism powerhouse?

At a regular press conference on July 10, Lin Yongsheng, spokesperson for the National Immigration Administration and director of its Policy and Legal Department, noted that with the continuous deepening and promotion of China's unilateral visa exemptions and transit visa-free policies, foreign arrivals are showing a rapid growth trend. Data released by the administration shows that in the first half of this year, foreign arrivals reached 22.914 million, a 20.4% year-on-year increase, indicating fast growth. Among these, 17.815 million entered visa-free, accounting for 77.7% of all foreign arrivals, a rise of 30.6%. The top ten source countries for foreign travelers in the first half were South Korea, Russia, Malaysia, Vietnam, Thailand, Singapore, the United States, Japan, Mongolia, and Australia, together accounting for 62% of the total.

It is evident that visa-free policies are the core driver of inbound tourism growth. According to the administration's data, visa-free entries now comprise 77.7% of all foreign arrivals, with a growth rate (30.6%) far outpacing the overall increase in foreign visitors (20.4%). Feng Yanbing, general manager of Beijing Zhong'an Hotel, explained that the visa-free policy has brought a rapidly growing and diverse customer base. Leveraging its cultural resources, including the former residence of Edgar Snow and the birthplace of "Red Star Over China," the hotel has assembled a 15-person bilingual tour guide team offering daily scheduled tours. In the first eight months of 2026, its inbound room nights on Trip.com Group's overseas platforms surged 121% year-on-year.

However, competitiveness in inbound tourism cannot be measured by visitor numbers alone. Although China's international tourism appeal and visitor scale now rank among the world's top, there remains room for improvement in international tourism revenue, per-visitor spending, and service conversion efficiency. The report's data shows that in 2025, China's international tourism revenue per visit was $357.3, only 29.1% of the global average. Extending visitor stays, deepening spending, and improving service conversion efficiency have become critical propositions for the next stage of inbound tourism development.

Where are the real bottlenecks in China's inbound tourism?

Why do some visitors come but not stay long enough, experience deeply enough, or have their consumption scenarios fully unlocked? To address this, the report constructs a five-dimensional framework comprising tourism supply capacity, destination appeal, transportation accessibility, service quality and experience, and the comprehensive socio-economic environment. This framework opens up the conversion process from "visitor arrival" to "consumption realization."

These five dimensions essentially boil down to five straightforward questions. Why are visitors willing to come to this city? That points to destination appeal. Can they arrive smoothly and travel between cities? That concerns transportation accessibility. Once here, what experiences are available, and can specific products meet their needs? That reflects tourism supply capacity. Are booking, payment, language, accommodation, and mid-journey services seamless, and can demand translate into actual spending? That hinges on service quality and experience. Meanwhile, the degree of openness, public safety, market order, and urban governance determine whether the entire chain can operate stably over the long term—this is the comprehensive socio-economic environment.

The research indicates that among the five dimensions, enhancing service quality and experience has the most notable effect on unlocking inbound tourism growth potential. Observations from Trip.com Group in its actual operations corroborate this: pain points for inbound tourists are concentrated in language communication, product comprehension, itinerary connections, and handling unexpected situations, with mid-journey service issues being particularly prominent. For example, Meng Kai, sales director of Beijing Futin Hotel, noted that the hotel has improved its reception capacity through multilingual signage in Chinese, English, and Russian, travel guides for surrounding areas, and AI translation tools. In the first eight months of 2026, the hotel's inbound room nights on Trip.com Group's overseas platforms rose 153% year-on-year.

It should be noted that the five dimensions are not an independent checklist. Appeal can drive visitor flow, but without complementary products, transportation, and services, a city may still face "high traffic, low conversion." The report emphasizes that the five dimensions form an integrated whole; addressing just one link is insufficient. Visitors tend to travel across cities in connected itineraries, and the brand and services of central cities can drive surrounding destinations, though cities with similar resources and products also compete with one another. Consequently, the report concludes that the next stage of inbound tourism competition will involve not just resources and marketing, but the capacity for systematic reception and consumption conversion.

How can resource advantages be turned into products that overseas customers can buy?

Looking first at the demand side, the report points out that inbound tourism demand is becoming more fragmented, with travelers choosing increasingly diverse destinations. Sun Tianxu, vice president of Trip.com Group, noted at a related academic exchange during the China International Fair for Trade in Services that Trip.com Group's overseas platforms saw their inbound destination coverage expand by nearly 100 cities in the first half of 2026 compared to the same period last year. Long-haul source markets are growing rapidly; in the first quarter of 2026, travelers from Europe and the United States accounted for 25% of inbound tourists served by Trip.com Group. In the first half, inbound order growth from European markets such as Spain, France, Belgium, Italy, and the Netherlands each exceeded 100% year-on-year.

Demand is fragmented, and tourism supply is equally so. The report draws a comparison with the automobile manufacturing industry, which achieves concentrated growth through capital, technology, leading enterprises, and vertical supply chains. Tourism, by contrast, is driven by tourist demand and horizontally connects a vast number of operational entities—accommodation, dining, transportation, retail, and entertainment—with low chain density and many independent small and medium-sized businesses. On one side is fragmented demand; on the other, fragmented supply. In between, someone must connect the two.

Online travel agency platforms sit precisely at this intersection of demand and supply. The report distills the industrial value of China's OTAs into two layers: first, aggregating global demand and domestic supply to lower tourists' search, comparison, and transaction costs, as well as merchants' internationalization costs; second, using standards, tools, data, and operational guidance to transform local resources into tradeable service products that overseas tourists can understand, find, book, and enjoy.

Trip.com Group's practices are unfolding along the report's five dimensions. In terms of the comprehensive socio-economic environment, since 2017, James Liang, co-founder and executive chairman of Trip.com Group, has driven the company's collaboration with the Center for China and Globalization to publish research reports on inbound and outbound tourism, while continuously advocating on issues such as visa facilitation, international flight routes, cross-border payments, scenic spot reservations, and language services. On tourism supply, Trip.com Group has helped over 170 scenic areas launch multilingual websites and deployed multilingual self-service ticket machines at nearly 300 sites. In the first half of 2026, domestic hotels accepting inbound orders on its platforms reached 139,000, a 33.6% year-on-year increase. On service quality, Trip.com Group leverages AI to provide product information display in up to 16 languages for over 8,000 scenic areas and 450,000 hotels across China. On destination appeal, Trip.com Group partnered with Jackie Chan to promote Chengdu, Guilin, Luoyang, Dali, and Dunhuang to international markets, driving inbound ticket bookings for these five cities to double year-on-year in the third quarter. On transportation accessibility, since April 2024, Trip.com Group has operated a free half-day tour at Shanghai Pudong Airport, with services now covering Beijing, Shanghai, Shenzhen, and Hong Kong, serving over 30,000 participants from nearly 130 countries and regions.

These efforts are also extending to smaller, more dispersed merchants. In the first half of 2026, inbound hotel merchants in fourth- and fifth-tier cities on Trip.com Group's platforms grew 46.2% and 47.9% year-on-year respectively, significantly outpacing the national average increase of 33.6%. In the first quarter of 2026, the platforms served approximately 7 million inbound tourists, with inbound tourism orders growing about 90% year-on-year.

What role do platforms play in promoting inbound tourism consumption?

Stepping back from the five-dimensional framework reveals a deeper industry logic. The report notes that China's tourism industry has followed a path different from traditional developed countries: mass tourism expansion, long-tail supply growth, transportation infrastructure improvement, mobile internet penetration, and channel digitalization have occurred almost simultaneously. As a result, China's tourism industry and OTAs have developed in tandem, with platforms participating from an early stage in building product standards, transaction rules, payment systems, language support, customer service, review mechanisms, and fulfillment systems.

This also means that, compared with other mature tourism markets overseas, OTAs have a higher degree of participation in shaping China's tourism supply. This "shaping" role is especially valuable in the service segment. At the trade fair, Liu Haiqiu, head of Beijing Jinhe Travel Agency, stated that Trip.com Group's operations team helped the agency establish a standardized service system covering pre-trip, mid-trip, and post-trip stages, integrating customer response, solution delivery, travel reminders, mid-journey concierge services, and visitor feedback into a unified process. "Initially, it was to meet the platform's NPS requirements, but over time, high-quality service became a team habit," Liu said. With this system in place, the agency, which has focused on inbound tourism for about 15 years, has gradually shifted from a traditional B2B ground operator to a small-group customized tour team serving overseas consumers directly, growing its staff from 6-8 people to over 20.

The value of this seemingly small matter lies in the fact that standardization has always been a challenge in the service industry, particularly for tourism, where travel agencies face numerous, highly non-standard service touchpoints. Trip.com Group has taken on this difficult task. Additionally, Trip.com Group has been deeply involved in building inbound tourism infrastructure, including multilingual support, product label optimization, and merchant training. For hotels, for instance, the platform collects details from merchants one by one and highlights them on product pages for different countries and regions—such as emphasizing halal dining and other friendly facilities for Muslim travelers, or showcasing non-smoking rooms and smart toilets on its Japan site. These tasks are difficult for individual small and medium-sized merchants to accomplish independently.

Chen Xiaodan, a customization specialist at Beijing Jinhe Travel Agency, also observed: "Inbound tourists are no longer satisfied with standard routes like the Forbidden City, Tiananmen, and the Great Wall; they want to experience hutongs, courtyard homes, and the daily lives of residents." From Trip.com Group's perspective, the platform's role is not to replace destination development but to help destinations turn their resource advantages into product advantages that overseas markets can understand and purchase.

James Liang has proposed that by 2030, China's inbound tourist numbers could rise to roughly three times current levels, generating approximately $300 billion in tourism foreign exchange revenue, equivalent to about 2-3% of GDP. "Going forward, Trip.com Group will continue to focus on our goal of helping attract 200 million inbound tourist visits over five years, assisting more Chinese destinations and tourism enterprises in entering the global market," Sun Tianxu said.