Summary of Key Points
The cultural and tourism market was exceptionally booming during the summer of 2026 (with 1.23 billion domestic tourist visits and revenue exceeding 920 billion yuan in July, both reaching five-year highs). However, travel agencies found themselves in a dilemma of extreme contrast: smaller and mid-sized agencies were closing down at an accelerated rate (thousands during the summer), while leading companies only experienced weak growth in their domestic businesses, with barely any improvement in their international travel services. The fundamental reason is that OTAs (Online Travel Agencies) and AI have completely replaced the core value of traditional travel agencies—namely, the ability to provide packaged travel services based on information asymmetry. Even if international travel services manage to hold their own for now, they cannot prevent the industry from declining in the long run.
I. The Cultural and Tourism Market Booming: Local Initiatives and Price Cuts Lead to Record Numbers
The success of this summer's travel market can be attributed to a combination of efforts from various regions and industry players:
- Government Investment: Guangdong Hengqin distributed 50 million yuan in consumption vouchers (covering tickets, hotels, etc.), while cooler destinations like Qinghai and Inner Mongolia offered substantial subsidies, along with special discounts for students and exam candidates.
- Industry Price Cuts: Airfare prices dropped by 30%-50% before and after the peak travel season, hotels reduced their prices by 5%-8%, and high-speed trains also offered discounts.
- Immediate Results: Tourism visits increased by 18.7% year-on-year in July, with revenue exceeding 920 billion yuan, and the total number of summer visits is expected to exceed 1.8 billion.
In short, as long as prices are reasonable and the experiences are novel, tourists are willing to spend money—the “atmosphere” of the cultural and tourism market has been thoroughly ignited.
II. How Cold Is the Travel Agency “Winter”?
Travel agencies are facing more difficulties than expected:
- Accelerated Closures: The number of new registrations has been declining over the past three years (from 102,600 in 2023 to 80,100 in 2025), while the number of closures has been increasing (from 47,300 in 2024 to 48,600 in 2025), with thousands of agencies closing down during the summer of 2026.
- Leading Companies Struggling: Listed travel agencies such as China Youth Travel Service and Zhongxin Tourism are either in the red or experiencing weak growth. Even those affiliated with popular tourist attractions (e.g., those under Emei Mountain or Zhangjiajie) are struggling to expand and make profits.
- A Race for Survival: There are currently around 450,000 travel agencies in the industry, but with fewer new registrations and more closures, it is possible that no new agencies will be established in the next two to three years, leaving only the established players competing with each other.
III. OTAs Take the Lead: Young People Prefer Independent Travel, and Online Solutions Are Enough
What do traditional travel agencies rely on for their business? “Information that you don’t know, and the ability to book everything for you.” However, this no longer works with the advent of OTAs:
- Information Asymmetry Disappears: Travel guides on platforms like REDnote and Douyin provide more detailed information than travel agencies (e.g., where to find porcelain in Jingdezhen or which restaurants in East Lake, Wuhan are good), and even the Wi-Fi passwords for tourist attractions can be found online.
- All Services Online: Platforms like Ctrip, Meituan, and Fliggy allow users to book flights, hotels, and tickets in one place, and even rent cars. Young people prefer independent travel and dislike the forced shopping, schedule pressure, and check-in-based tours offered by travel agencies.
- Giants Entering the Market: Companies like Didi and JD.com are looking to enter the travel industry, and even hospitality companies like Huazhu are considering entering the travel sector—online platforms have completely replaced the packaged travel services provided by travel agencies.
IV. AI Completes the Demolition: Even the Last Remaining Value Is Taken Away
While OTAs have made travel agencies less competitive, AI has made them practically useless:
- AI Can Do Everything Travel Agencies Do: If you say, “I want to take my child to Yunnan for 5 days with a budget of 5,000 yuan,” AI can immediately generate a travel plan, book flights and hotels, and recommend family-friendly attractions. AI can also act as a guide at museums and create Vlogs with accompanying text after the trip.
- AI Is More Reliable: Travel agencies rely on price differences for profits, which can lead to issues like forced shopping and mismatched products. AI, on the other hand, aims to attract users with higher-value services (such as advertising and membership programs).
- OTAs Still Offer Some Offline Assistance, but AI Can Do That Better: In the past, travel agencies could help online users with offline issues (e.g., unexpected local problems), but now AI can respond in real-time and even faster than humans.
V. Is International Travel the “Lifesaver”?
International travel is the only area where travel agencies can still experience growth:
- Why Do People Still Need Travel Agencies?: Language barriers and lack of local knowledge mean that travel agencies are still needed for services like arranging accommodations for foreign tourists in China or Chinese tourists in Southeast Asia.
- But This Is Also a Dimming Light: Companies specializing in international travel (e.g., Yuanhai International) have only a 10%-15% gross profit margin and less than 3% net profit margin—these are tough profits to make. Moreover, OTAs are becoming more global (e.g., Ctrip expanding into international markets), and AI can provide multilingual guides and translations, reducing the information asymmetry that travel agencies once had.
Therefore, international travel is just a temporary reprieve and will not sustain the industry for long.
In Conclusion
The era of traditional travel agencies as intermediaries is over—OTAs and AI have completely eliminated their core value. Unless travel agencies can transform into specialized services (e.g., luxury study tours or professional expeditions), most of them will gradually disappear. The cultural and tourism market is booming, but traditional agencies no longer play a significant role in it.