CICC released a research report stating that the tourism industry's 1H25 performance fell short of expectations, with leisure demand below expectations, primarily due to consumer spending pressure and extreme weather impacts in some regions. The trend toward quality and differentiated demand has become more pronounced. The firm recommends focusing on new project progress and the effectiveness of existing project improvements while maintaining coverage ratings. Attention should be paid to industry and individual stock fundamental trends and potential catalysts, with recommendations to focus on Songcheng Performance Development Co.,Ltd. (300144.SZ), CHINA TRAVEL HK (00308), and Emei Shan Tourism Company Limited (000888.SZ).

CICC's main viewpoints are as follows:

Leisure demand below expectations, primarily due to consumer spending pressure and extreme weather impacts in some regions

In 1H25, visitor numbers for Huangshan/Wuzhen/Gubei Water Town/Mount Emei/Changbai Mountain changed by +5.8%/-11.9%/-18.4%/-6.5%/-4.6% year-over-year respectively. Leisure demand during the peak summer season remained lackluster, as shown by China Railway Corporation and flight management data indicating that national railway passenger volume and domestic civil aviation passenger traffic in July-August increased by +4.7% and +2.4% year-over-year respectively.

Regarding tourism scenic areas, the firm estimates that Wuzhen's revenue declined nearly 20% year-over-year in July due to extreme weather impacts, while August saw approximately 25% year-over-year revenue growth as weather improved and operations enhanced. Gubei Water Town's summer performance is estimated to remain under pressure due to extreme weather and other factors. Changbai Mountain benefited from IP marketing and other enriched activities as well as expanded capacity, with visitor numbers increasing +26.2% year-over-year in July-August.

Outbound and inbound tourism maintained relatively rapid growth. According to National Immigration Administration data, national border crossings increased +15.8% year-over-year in H1, with visa-free foreign visitors up +53.9% year-over-year. Flight management data shows international passenger traffic increased +13.7% year-over-year in July-August.

Tourism demand quality and differentiation trends continue

Ctrip data shows the summer family tourism market continued its expansion trend, with family travelers accounting for 35% of total travelers, and consumption displaying trends toward diversified themes and enriched experiences (such as camping and hiking outdoor product searches increasing 120% year-over-year). Meituan's summer report shows emerging segmented demand scenarios ("traveling following sports events/performances" becoming popular) and strong quality travel demand (premium small group orders accounting for 40% of summer group tour orders, up 90% year-over-year).

Focus on new project progress and existing project improvement effectiveness

1) CHINA TRAVEL HK signed an agreement on August 26 to acquire Songhua Lake Ski Resort and ski resort operation management team under Vanke (75% equity stake), with the company expecting to complete the transaction in 2H25. This project has stable period annual visitor volume exceeding 350,000 and revenue exceeding 300 million yuan, which the firm expects to contribute incremental profits to the company. Additionally, the company focuses on four major natural and cultural scenic destinations in Ningxia, Yunnan, Xinjiang, and Guangxi, building brand benchmarks through both asset-light and asset-heavy approaches.

2) Songcheng Performance Development's Hangzhou project will undergo renovation focusing on leveraging core performance advantages and integrating Song Dynasty culture with modern diverse cultural elements. The Foshan project will strengthen outdoor performance innovation, group customer market development, and evening show incubation. The Sanya project has completed phased renovation and upgrades, with attention on subsequent existing project improvement effects.

3) China Youth Travel Service strengthened the Gubei Water Town management team in Q2, focusing on family tourism direction, combining unique resource endowments such as Simatai Great Wall to develop more suitable study tours, cultural and creative products, while continuously strengthening brand marketing.

Risks: Consumer spending recovery falling short of expectations; deteriorating competitive landscape; companies' inability to enhance management capabilities to respond to changes.