How China is rolling out the virtual (and digital) red carpet for tourists

By the end of lockdown in 2021, it seemed as though the whole world had cabin fever. In between Zoom meetings and endless doomscrolling, thoughts constantly drifted to sunny beaches, snowy mountaintops and faraway cities. But as vaccinations became widely available and borders reopened, fantasies began transforming into real-life bookings.

Now global tourism is surging. In the first three months of 2024, some 285 million tourists traveled internationally, reaching 97% of pre-pandemic volumes.

Amid this trend, China is making a concerted effort to attract foreign visitors. It officially reopened in 2023 after 1,000 days of travel restrictions. It’s now rapidly expanding unilateral visa-free arrangements with certain countries, including Australia, New Zealand, Malaysia and 17 European countries, which spurs more international flights. China is also investing in and opening up its service infrastructure, especially electronic payment systems as Mastercard has been working to connect China to the rest of the payments world.

The ripple effect of all these efforts could go well beyond China’s tourism industry, with stronger travel to the country expected to boost overall economic activity in both China and throughout the Asia-Pacific region. And it can all start with easier ways to buy goods and services, says Dennis Chang, Mastercard’s president for Greater China: “We are fully mobilizing our own resources to create a more open and diversified payment system.”

A catalyst for economic growth

Initially, tourism was slow to return to China, but by the end of December the market is expected to recover to around 80% of 2019 levels. Recent research by the Mastercard Economics Institute with Trip.com, Alipay and the World Tourism Alliance showed the top five inbound origin countries were Japan, Malaysia, South Korea, the U.S. and Australia, with a sustained surge from Southeast Asia and a robust resurgence in tourism from Europe, particularly France, Spain and Italy.

Younger travelers are on the rise, with the percentage of travelers aged 20 to 35 rising by 9% in 2024 since before the pandemic. And they’re traveling farther from traditional tourism destinations like Beijing and Shanghai, putting emerging cities like Chengdu, Xiamen, Chongqing, Suzhou and Xi’an on bucket lists. Tourism spending skyrocketed in Zhangjiajie in particular — that’s the region in northwestern Hunan Province that’s home to the Zhangjiajie National Forest Park, which features towering quartz-sandstone pillars that inspired the floating mountains of the “Avatar” movies. In the first quarter of 2024, inbound tourism spending in Hunan grew nearly 24 times year over year.

For China, this all represents a huge economic opportunity. Because travelers buy so many different services — including hotel stays, transportation and entertainment — the revenue from each visit extends beyond the tourism industry. When reservations surge at a popular restaurant, for example, the kitchen stocks up on extra ingredients; when a bus line sells more tickets, it can afford additional vehicles; all of this stimulates revenue for suppliers who never encounter the travelers face to face.

Every yuan generated from tourism generates 4.3 yuan in related industries, says Liu Shijun, vice chair and secretary-general of the World Tourism Alliance, a nonprofit industry group based in China, in addition to creating jobs, boosting income and propelling more spending.

“The tourism industry catalyzes new products and businesses and optimizes the industrial structure,” Liu says. “It has great potential in promoting economic growth.”

Industry players see both opportunities and challenges in the recovery of inbound tourism. “China’s favorable inbound policies, the recovery of international flights, and digital and smart transformation of the tourism sector bring opportunities,” explains Sun Bo, chief marketing officer of Trip.com Group, a major travel service provider headquartered in Shanghai. “However, international competition is fierce, and countries are actively promoting themselves for international tourists, making it a challenge to stand out.”

How is the Chinese tourism industry approaching this? Sun anticipates the launch of more customized and themed tours, such as sports, health and wellness and ecological, and more targeted marketing to specific travel segments. Technology will continue to play an essential role, he says. “Through artificial intelligence, immersive experiences and other technologies, travel companies can offer more personalized and intelligent services.”

To accelerate the recovery of inbound tourism, Liu called for optimizing tourism products and services, enhancing destination marketing, strengthening foreign language training for tour guides — especially less-studied languages — and making payment infrastructure more efficient and convenient.

Bridging the payment divide

After all, tourists won’t spend if they don’t have an easy way to pay. Many international visitors are used to paying with cards, while in China digital payments are more popular, with QR code scanning the dominant method. “The ideal payment environment should be globalized and seamlessly compatible,” Chang says. “At Mastercard, we want to bring all options to our consumers.”

In response, public and private organizations in China are working together to make it easier for overseas tourists to transact. For example, Mastercard’s Pay Like a Local program lets travelers make purchases the same way Chinese residents do: by scanning a QR code at the register. Tourists can link their internationally issued Mastercard cards to fund digital wallets on the Alipay and WeChat apps, which are accepted by 80 million merchants around the country.

Mastercard and Ant Group, the parent company of Alipay, have also homed in on the destinations most popular with tourists, collaborating with other payment organizations to create International Consumer Friendly Zones in Beijing, Guangzhou, Shanghai, Chengdu and Chongqing. Anyplace tourists tend to regularly visit in those cities — from airports to hotels to shopping districts — the companies have listed the accepted payment options in multiple languages, provided comprehensive user guides and offered extra training for merchants. And Mastercard has collaborated with the Beijing rail transit to allow contactless payment at nearly 500 stations — helping people avoid having to find an ATM, exchange currency or buy a fare card.

In addition, Mastercard partnered with the Beijing Municipal Bureau of Culture and Tourism to relaunch its Priceless Beijing platform, which grants cardholders exclusive access to cultural activities and events. Through Priceless Beijing, participants can enjoy afternoon tea atop the Great Wall, go behind the scenes at the Peking Opera, or dine at a three-star Michelin restaurant as the executive chef personally explains the concept behind each dish.

And as of spring 2024, residents of China can enjoy the same perks. In a joint venture with China’s NetsUnion Clearing Corporation (NUCC), Mastercard is now processing payments made in China with cards issued by the country’s banks, allowing Chinese cardholders to use their Mastercard cards both abroad and at home.

As global tourism continues to grow, Chang believes Mastercard is poised to act as a bridge, supporting the flow of travelers and simplifying payments.

“The development of the Chinese payment industry will enable a digital economy that benefits everyone,” Chang says. “We look forward to offering consumers even more choices, helping to better connect China and the world.”

Photos from top: A father carries his daughter on his shoulders as they visit the Forbidden City, Beijing's imperial palace complex; the Great Wall of China at sunrise; the floating mountains of Zhanjiajie in Hunan Province; and the skyline of Shanghai lit at night.