UBS: China's outbound travel demand remains resilient, but spending is becoming more cautious, with average expenditure per trip down 15% year-on-year.

UBS released a research report stating that China's outbound travel demand remains resilient, but the recovery is more selective. Overall travel frequency improved, driven mainly by consumers in first- and second-tier cities, while travel frequency in third- and fourth-tier cities declined. Trip duration and future travel intentions have also softened. The bank remains constructive on outbound travel volume but expects consumers to budget more carefully. The report noted that over the past six months, outbound travel frequency among respondents in first- and second-tier cities increased from 2.3 to 2.5 trips, while in third- and fourth-tier cities it fell from 2 to 1.8 trips, back to 2019 levels. Average spending per trip fell about 15% year-on-year to RMB27,600, with a more pronounced decline in third- and fourth-tier cities. In terms of spending structure, travelers are reducing expenditure on non-essential categories such as shopping and entertainment, shifting toward essential travel expenses such as airfare and accommodation. Regarding destinations, UBS noted that Japan remains the top choice, but actual conversion to travel has weakened due to safety concerns, natural disaster risks, and rising travel costs. Hong Kong, Macau, and Singapore have remained resilient among certain traveler segments.