Behind China's small city travel boom: how can luxury leverage this opportunity?
This year, small cities across China have surged in popularity as inflation rises and the economy faces challenges. Unlike the big cities or famous tourist spots that typically drew crowds, more off-the-beaten-path destinations are now in the spotlight.
During the Qingming Festival, places like Tai’an, Zibo, Tianshui, Kaifeng, and Jingdezhen all saw their tourist numbers jump by over 50%. These cities either have deep historical roots or have gone viral on social media platforms like Xiaohongshu and Douyin. For instance, Zibo is famous for its BBQ, while Tianshui gained attention for its spicy hotpot (Malatang).
As this trend continues to grow, a key question arises: What opportunities does this present for the luxury market?
Where Is the Small City Travel Boom Heading?
During the May Day holiday, hotel bookings in county-level areas jumped by 47%, and supermarket orders rose by 55%. Since September, cultural and tourism bookings in Yichun (a small city in Jiangxi Province) during the Mid-Autumn Festival surged 326.9% year-on-year. Likewise, searches for Huizhou (a small city in Guangdong, near Shenzhen) skyrocketed by 227.2%, and hotel bookings during the Mid-Autumn Festival rose by 229.9%, with more than half of those bookings made by people aged 20-30.
Why Are Small Cities Becoming Popular?
Several factors explain this rise in popularity:
Younger travelers are increasingly looking for unique, off-the-beaten-path experiences.
China’s unique holiday schedule and limited annual leave mean that many people travel during peak times, leading to overcrowding in major cities. This has prompted travelers, particularly younger ones, to seek alternatives.
The economic slowdown has also played a role, making local trips more attractive due to their affordability. In smaller cities, it’s even possible to stay in five-star hotels at much lower prices than in big cities.
How Are Small Cities Attracting Tourists?
Cafes and Digital Nomads: Some villages in Anji County, Zhejiang, old bamboo processing facotires have been transformed into digital nomad communities. Anji, a small mountainous county with fewer than 600,000 residents, is now home to over 300 cafes. Some of these cafes report daily revenues exceeding 300,000 RMB.
Highlighting Local Culture: Quzhou, a lesser-known city in Zhejiang, has capitalized on this trend by highlighting its rich cultural heritage, including unique performances such as Longyou’s “hard-headed lion,” Jiangshan Wu Opera, and Qujiang Opera. This has drawn increasing numbers of visitors to this culturally vibrant city located at the crossroads of four provinces.
Going Viral on Social Media: Earlier this year, Tianshui, a small city in Gansu province, became a tourist sensation thanks to its renowned Malatang (spicy hotpot). The trend was sparked by a vlogger whose videos showcased the affordability and variety of Tianshui’s Malatang, drawing young tourists to the area. According to Trip.com, from March 1 to 16, tourism bookings for Tianshui increased by 40% year-on-year, with hotel bookings up by more than 60%. Notably, 49% of the tourists were from outside the province.
What Are the Opportunities?
A huge market
With over 2,800 county-level administrative regions in China, the potential for growth is significant. According to Qunar, the average cost of a Tianshui Malatang meal is around 30 RMB, but it can drive 650 RMB in related local spending.
Similarly, a 40 RMB high-speed rail ticket to see the "blue tears" phenomenon in Pingtan can lead to an additional 700 RMB spent locally. A report on county-level tourism in 2024 found that, in 2023, the average tourism revenue across 1,866 counties was 4.295 billion RMB, with an average of 5.0827 million visitors per county.
Potential opportunities for luxury hospitality
This Mid-Autumn Festival, many young people chose to stay in county-level destinations, where they could enjoy five-star hotel services at lower costs.
Bookings for five-star/luxury hotels in county-level cities grew by 1,400%. According to Meituan, in the first week of September, the most popular county-level destinations for travelers under 30 were Changli County in Hebei, Huidong County in Guangdong, Chun’an and Changxing Counties in Zhejiang, Lingshui County in Hainan, and Wuyuan County in Jiangxi. Other lesser-known counties are also seeing growth. For example, Changting County in Fujian saw a 1,400% increase in five-star hotel bookings, Fengxin County in Jiangxi saw a 1,200% rise, and Zhongmu County in Henan experienced a 1,150% surge.
Luxury hotels in smaller cities are catching travelers’ attention by offering "high quality at reasonable prices." According to Trip.com, the average price for a five-star hotel in fourth- and fifth-tier cities was about 10% lower than in first- and new first-tier cities during the lead-up to the Mid-Autumn Festival.
Pop-up events on the hotspots
Fashion and luxury brands previously leveraged the rising ski trend by launching pop-up stores in cities like Harbin. This strategy could be replicated amid the current small city travel boom by selecting culturally rich destinations. Such an approach would deepen localization efforts and better resonate with China’s younger generation.
Which Small Cities Are Popular This Year?
According to Meituan’s recent 2024 Young People’s County-Level Travel Report, the top county-level destinations for young travelers this summer were Dali, Pingtan, Rongcheng, Dunhuang, and Yanji.
