Industry status
The State Council issued the tourism development plan for the 14th five year plan (hereinafter referred to as the “plan”), which proposed to innovate and improve China’s tourism under the condition of normalization of epidemic prevention and control, accelerate the release of domestic demand potential and supply side reform, step by step and orderly promote inbound tourism and steadily develop outbound tourism under the premise of effective control of the international epidemic.
Commentary
We will accelerate the release of domestic demand potential and upgrade cultural and tourism consumption for a long time. The plan puts forward the important task of expanding domestic demand for tourism. In 2019, the number of trips per capita in China and the United States was 4.3 and 7.1 respectively, and the per capita travel cost in the United States was nearly three times that of China. Since 2020, due to the major impact of covid-19 epidemic, the national travel demand has been restrained. In the long run, driven by residents’ desire for a better life, tourism consumption demand will change from low-level to high-quality and diversified, and from focusing on tourism to taking into account tourism and leisure vacation. The plan proposes to optimize the tourism consumption environment, improve the holiday system, and promote various regions to formulate and implement specific measures for paid leave. We are concerned about the continuous release of national tourism and leisure demand after the epidemic. It is expected that there is a broad space for the growth of per capita tourism times and per capita tourism expenditure, so as to promote the prosperity and development of the tourism market for a long time.
Accelerate supply side reform and enrich high-quality supply. The following points are mentioned in the plan: 1) optimize the layout: build a tourism hub city, improve the supporting transportation services, and speed up the construction of Hainan international tourism consumption center and Pingtan international tourism island; Reasonably plan and build urban leisure vacation belt to create conditions for urban residents’ micro vacation and micro tourism. 2) Create high-quality products: by 2025, build a number of world-class tourist attractions and resorts with rich cultural heritage, and build a number of national tourism and leisure cities and blocks with distinctive cultural characteristics. Mention promoting the development of red tourism, rural tourism, ice and snow tourism, etc. 3) Enhance the vitality of market players: strengthen, optimize and expand backbone tourism enterprises; Support travel agencies to develop in the direction of “specialization, characteristics and innovation”, timely and comprehensively implement the policy of tax reduction and fee reduction, and solve difficulties for market players. 4) Promote the development of smart tourism and accelerate the application and innovation of new technologies. We expect that the supporting facilities will continue to be improved, and the high-quality leaders will lead the industry with strong product power, operation power and innovation power to build a high-quality benchmark.
Pay attention to the control of inbound and outbound tourism and release it in a timely and orderly manner. Since 2020, affected by covid-19 epidemic, the control restrictions on inbound and outbound tourism have not been released. The plan proposes to promote inbound tourism step by step and orderly, steadily develop outbound tourism, and deepen cooperation with Hong Kong, Macao and Taiwan on the premise that the international epidemic is effectively controlled. Combined with the recently released civil aviation 14th five year plan, it is proposed to “focus on expanding the Chinese market and restoring the international market” in 2023-25. We believe that although there are still epidemic variations and repeated disturbances outside China, the plan still reflects the willingness to promote tourism opening and cooperation. It is suggested to pay attention to the preparations for orderly liberalization on the premise of controllable epidemic situation.
Valuation and recommendations
Maintain the profit forecast, target price and rating unchanged. Pay attention to the recovery elasticity of the hotel tourism sector, and be optimistic about the consumption leader China Tourism Group Duty Free Corporation Limited(601888) with high growth certainty, the three hotel leaders Huazhu, Shanghai Jin Jiang International Hotels Co.Ltd(600754) , Btg Hotels (Group) Co.Ltd(600258) , the tourism leader Songcheng Performance Development Co.Ltd(300144) (the performance leader actively adapts to the changing situation), China Cyts Tours Holding Co.Ltd(600138) (the development and operation of the scenic spot is leading, and the Gubei water town around the city performs well) Fosun tourism culture (leading the trend of family leisure and vacation in China and continuous recovery of overseas business), Hong Kong China Travel (focusing on the recovery of business flexibility in Hong Kong and Macao).
Risk
The impact of epidemic control on tourism travel exceeded expectations.
