The Tragedy of China's Tourist Attractions

Running a tourist attraction requires passion. Perhaps passion is the only reason many tourism professionals persist. Why do we keep talking about passion? Because it’s hard to make money in this industry, let alone build a career, so passion is just a way to console ourselves!

—Preface

In 2019, tourist attractions were almost in ruins: some 5A-level parks went bankrupt, some 4A-level ones closed down, and 3A-level or lower attractions struggled to survive. A wave of delisting strikes—high-level attractions were in chaos! A wave of price cuts strikes—state-owned attractions had a tough time! A wave of visitor diversion strikes—traditional attractions were left in a mess! A wave of bankruptcy strikes—small and medium-sized attractions were unstable! A wave of debt collection strikes—over-leveraged attractions were in urgent trouble!

Over the years, I’ve seen countless attractions and met too many investors, hearing too many heartbreaking stories. Tourist attractions have become a quagmire for countless investors and a place where many bury their dreams. But ten years ago, it wasn’t like this. From 1979 to 2009, it was an era of tourism scarcity, a seller’s market. Every new attraction opened was a success. From 2009 to now, it’s an era of tourism oversupply, a buyer’s market. Many attractions open, but few thrive. Is the market really becoming harder? Or are there many other reasons behind it?

Five Major Challenges Facing China’s Tourist Attractions

Given the current situation, tourist attractions have entered a period of growing pains and elimination. Whether they can survive depends on no one else but their own ability to adapt. To be blunt, the failure of many projects is entirely due to human error, and this trend will continue to spread. This is not just a period of industry adjustment, but also the beginning of speculators paying for their blind decisions. Running a tourist attraction is incredibly difficult, but no matter which path lies ahead, there is no turning back!

1. Unstable Foundations Make Development Difficult!

The reasons for entering the tourist attraction business vary, which is why the number of attractions has grown so rapidly. It’s also the unspoken secret behind why most attractions lose money. With an unstable foundation, everything you do will eventually come back to bite you!

The tourist attraction industry itself is characterized by large upfront capital investments, uncontrollable later-stage operational factors, and long recovery cycles. Constrained by resource conditions, most tourist attractions are located in remote, hard-to-reach places with few people. More critically, due to their natural attributes, the number of daily visitors is limited, especially during peak seasons when some tourists may not even be able to visit on the same day. Additionally, visitor numbers are heavily influenced by the weather, with harsh conditions causing a sharp decline in tourists. Thus, attractions have their own bottlenecks and ceilings for visitor volume. Coupled with limited room for ticket price increases and a restricted profit model, their inherent profitability is already constrained. These inherent drawbacks directly lead to the inability of most attractions to survive on their own operations, relying instead on capital injections from outside industries.

Given this, if it’s so hard to make money by operating a tourist attraction, why are so many investors racking their brains to get into this business?

Many bosses aren’t initially aiming for the attraction itself but are eyeing the benefits beyond it. In other words, many attractions exist because of hidden agendas. It could be political bartering, securing resources for subsidies, fulfilling some personal sentiment, serving as a crucial link in an industrial chain, or covering up even more unspeakable secrets. The mainstream practice now is to use daily revenue to cover operating costs and then pass the buck for profit, but this approach is basically unworkable.

Because many people enter the attraction business not to make money from operations, their different goals dictate different operation modes and future development paths. These varied decision-making backgrounds and atmospheres have become the endorsement of diverse, often baffling market operation strategies for attractions.

**Failing to understand the industry’s rules properly, coupled with impure motives for entering the business, has destined the existence of many tourist attractions to be a tragedy from the very start.**2. Difficulty in Coping with Market Oversupply!

The intense market competition is shrinking the survival space for scenic spots. Meanwhile, the false prosperity created by some scenic spots that concentrate superior resources has led more uninformed investors to keep pouring in.

By the end of 2007, China had a total of 2,492 A-level scenic spots, including 130 1A-level, 927 2A-level, 511 3A-level, 858 4A-level, and 66 5A-level ones.

By the end of 2017, there were over 30,000 scenic spots (including 10,340 A-level ones, of which 249 were 5A-level and 3,034 were 4A-level), 52 World Heritage sites, 506 pilot units for all-for-one tourism demonstration zones, and 300 classic red tourism scenic spots. In terms of leisure and vacation, there were 26 national-level tourism resorts, 10 tourism and leisure demonstration cities, and 110 national eco-tourism demonstration zones. For thematic tourism, there were 6 China cruise tourism development pilot zones, 10 national wetland tourism demonstration bases, 514 self-driving and RV campsites under construction, along with a large number of new products integrating “tourism+” fields like health tourism, industrial tourism, sports tourism, tech tourism, and study tourism, as well as new business models like 798, Nanluoguxiang, and Yuanjiacun.

In just ten years, the number of A-level scenic spots has increased fivefold. Currently, the number of scenic spots means that each county in China has roughly 1.5 national 4A-level scenic spots and over a dozen A-level ones. This doesn’t even include the countless individual rural tourism ventures outside the scenic spot system, some small tourism projects, etc. According to relevant industry statistics, with a conservative estimate, there are currently around 100,000 tourism projects, while China’s population and tourist numbers have not increased significantly. It can be said that the development of tourism resources is now severely oversupplied!

During holidays, major media often report on overcrowding at tourist destinations, but these reports always focus on scenic spots with premium resources, such as the Forbidden City, Badaling Great Wall, West Lake in Hangzhou, the Terracotta Warriors, and Zhangjiajie. According to relevant data, nearly 80% of China’s tourists are drawn to national 5A-level scenic spots. When choosing tourist destinations, most people still opt for these highly famous spots with distinctive tourism resources, rather than spreading out evenly. So, even during the National Day Golden Week, many small scenic spots are nearly empty. Big scenic spots may see 100,000 visitors a day, while small ones only get a hundred. We can’t just say that the average daily tourist volume per scenic spot is over 50,000. That would seriously harm most small scenic spots. The media’s tendency to report good news rather than bad, along with their manipulation of promotional concepts, is also a reason many investors get fooled.

3. Numerous Pitfalls Make Survival Tough!

From the very start of preparing to enter the tourism attraction market, countless pitfalls await investors. Whether they can navigate through each one is a huge challenge. It can be said that without enduring countless trials, it’s difficult to make a name and achieve success in the market.

I summarize the main pitfalls encountered by tourism attractions into five key points. These five points are: policy-driven uniform guidance, leading to a surge in tourism resources and formats; planning that follows the same pattern, making attractions with similar resources monotonous; a single acceptance standard, requiring all attractions to be developed and assessed uniformly, stifling individuality; a unified Han cultural background, turning local cultural heritage into mere formalism within attractions; and a common approach of “crossing the river by feeling the stones,” lacking exemplary models or systematic theoretical guidance, leading to random imitation and chaotic outcomes.

Agricultural guidance sparked a wave of rural tourism; industrial transformation gave rise to countless characteristic towns; all-for-one tourism led to every village and county jumping on the tourism bandwagon. So, those with the conditions for tourism attractions build them, and then strive for A-level ratings. Those without conditions create them to meet the policy, and as soon as policies are announced, a flood of attractions emerges.

Planning follows the same template, designed merely to satisfy approval procedures, dreaming of a future that’s hard to achieve, yet offering no answers for the present path or operations. All attractions are developed and assessed according to the “Quality Grade Evaluation and Classification of Tourist Attractions” and the “Management Measures for Quality Grade Evaluation of Tourist Attractions.” With a unified Han cultural background, from the far south to the far north, you see the same architectural styles and clothing features. Minority characteristics are barely visible. Even in Yunnan, a region with many minority groups, you won’t see their unique traits except for emotionless routine performances within attractions, failing to convey the richness and diversity of multi-ethnic cultures.

Consumption at tourism attractions is cultural consumption—not a necessity but an optional expense. It involves long-distance travel, faces nationwide competition, has low repeat rates, and struggles to build customer loyalty. Combined with diverse resources and regional variations, consumer habits differ, leaving no perfect models to follow or systematic theories to guide development. The result is chaos. These challenges are unimaginable in other industries, where methodologies and business tactics don’t apply to tourism. Yet many investors fail to realize this, leading to blind confidence and decisions that drag attractions deeper into pitfalls.

It is precisely because of these five points that tourism attractions become monotonous and lack distinctiveness, missing core market competitiveness and profitability, effective industry guidance, and the ability to showcase cultural depth and innovation. How can such attractions survive in the market?! Therefore, it’s no surprise that many tourism attractions struggle to make ends meet and can barely sustain themselves.

4. Policy Direction is Hard to Predict!

The market is giving rise to new forms of tourism, but the uncertainty of industry policies like investment attraction and support leaves many new tourism projects vulnerable to a one-size-fits-all approach at any moment.

Since the “Huangshan Speech,” China’s tourist attractions have entered a new stage of market-oriented development. Local governments, departments, and sectors have shown unprecedented enthusiasm for tourism growth, and calls to streamline the management systems involving development, construction, water resources, forestry, land, cultural relics, and religious affairs have grown louder. However, due to the diversity of resources and the unpredictability of new business formats driven by the market, there is still much room for improvement in policy guidance and regulation.

For example, in early June 2018, CCTV exposed illegal land use in Beijing’s Changping district, where agricultural greenhouses were turned into “private estates.” This sparked a nationwide crackdown on “greenhouse villas,” with around 168,000 such cases discovered, involving 130,000 mu of farmland, and 80% of these issues have since been resolved. Yet, alongside these achievements, there has been misunderstanding, controversy, and even resentment from various sides. The reasons, aside from a lack of deep awareness of the harm of “greenhouse villas,” mainly lie in the “one-size-fits-all” and “over-expansive” enforcement in different areas, which has discouraged ordinary people, entrepreneurs, and investors.

In this nationwide campaign against “greenhouse villas,” leisure agriculture unfortunately suffered collateral damage, with insiders even calling it a “catastrophe.” We must remember that each demolished leisure farm represents not just lost structures, but the shattered hard work and dreams of their owners. Moreover, while it’s easy to tear down these farms today, it will be tough to encourage these people to try again in the future. CCTV even covered this issue to prevent the situation from worsening and to stop the “one-size-fits-all” trend from spreading.

Despite initially strongly encouraging and developing leisure agriculture, a sudden shift in policy led to a blanket crackdown, causing huge losses. Yet, who can guarantee that similar incidents won’t happen again? Tourism development is always tied to policy—sometimes it’s not just natural disasters, but man-made ones.

The state will continue to vigorously promote tourism in the future, but the focus of tourism development has shifted from traditional scenic spots to comprehensive tourism, rural tourism, and special-interest tourism. This means that future tourism will operate under a government-led framework of large-scale resources and markets. The competition between scenic spots will no longer be just among themselves, but largely between the population reserves of their locations and the strength of the government resources behind them. None of these are things a single scenic spot can control!

Getting in is easy, but getting out is hard! The future is already here, and the bankruptcy and restructuring of tourist attractions have just begun. Don’t think someone will pay for your losses, and you won’t find anyone to take responsibility—because no one will admit it. It has to be borne solely by the owner of the scenic spot!

5. Scenic Spots Struggle to Save Themselves!

The number of tourists visiting most scenic spots has been steadily declining, which has become a trend. So, if a scenic spot tries to save itself, can it quickly turn things around? I think, for most scenic spots at least, it’s impossible. Part of the reason is the market, and part is due to factors that scenic spots simply can’t overcome.

The state has been strongly promoting lower ticket prices for scenic spots, but it hasn’t solved the problem of how these spots can survive after the price cuts lead to bigger losses. Lowering ticket prices doesn’t necessarily mean more tourists will come, but it definitely means a significant drop in revenue. Whether they lower ticket prices or not, scenic spots seem to face the same issue of shrinking income and being unable to support themselves.

Because of heavy investments in infrastructure, scenic spots, big or small, often involve billions or tens of billions of yuan in spending. Yet, most scenic spots only earn a pitiful few million or tens of millions of yuan annually. Barely covering operating costs is already tough, and many are weighed down by interest payments from construction loans. Already struggling, finding extra money for renovations and upgrades is even harder. So, the current situation for most scenic spots can only be described in one word: “poor”!

The tourism industry is a sunrise industry, which also means it comes with significant uncertainties and transformative factors. Doing business in tourism is challenging, but it is also an industry full of opportunities. You must understand the trends, ground yourself in reality, grasp the future, and the chance to create brilliance will follow.

II. The Long Road Ahead for Tourist Attractions

In the early stages of tourist attraction development, people relied on resources, mainly leveraging channels and event planning. But now, except for attractions with extremely high-quality resources, most tourist attractions in China and tourism in some regions have entered a new era oriented toward tourists. The premise of this era is that the resources of most attractions no longer capture tourists’ attention. Tourists are no longer satisfied with sightseeing—they crave more cost-effective and enriching travel experiences.

The new era brings multiple uncertainties to tourist attractions, and these uncertainties will directly determine the future direction of China’s tourist attractions!

1. The uncertainty of industry resources behind an attraction. Every new attraction or a change in ownership at an old one is backed by massive funds or resources from other industries. The purpose of these investments in tourism will dictate the ultimate direction of these resources.

2. The uncertainty of tourism development resources. Whether there are landscapes, history, or culture, huge sums of money can be spent to create them. So, don’t assume developing an attraction requires specific resources—you might wake up one morning to find a new attraction right at your doorstep.

3. Dependence on the spending power of source markets. The more developed the consumer economy in the southeast coastal areas, the faster tourism models evolve. In the less economically vibrant western regions, the stronger local government support becomes, which can significantly disrupt local tourism environments.

4. Attractions no longer operate alone, and local governments are playing an increasingly dominant role in tourism. Various factors intertwine, turning tourism into a platform for integrating and circulating diverse resources.

Developing tourist attractions is no longer just about tourism itself; it’s more about building industries around tourism and pursuing other goals alongside it. Government-led tourism destination cities or large-scale projects will become the focus of future tourism development. Most small and medium-sized attractions without resource advantages or distinctive features will gradually be phased out.

Therefore, future operations of tourist attractions will reveal new trends and patterns, inevitably centered around industrial upgrades, project experience enhancements, and event planning innovations. As someone managing an attraction, you must think from a future perspective to propose solutions for future challenges. More importantly, you need to address current issues from a future angle, offer different strategies for different stages, and ensure the attraction develops as planned—with a plan that is actionable, sustainable, and open to monitoring and evaluation.

Intensified competition in the tourism market is an unavoidable trend. Adopting a market-oriented approach, aiming to meet tourist demands, and pursuing diversified profit models and market operation strategies are the paths that small and medium-sized tourist attractions must take. There are no miracles; you have to rely on your own situation, plan and layout wisely, and steadily carve out your own path. Develop products and management models tailored to your attraction’s unique features. Every attraction’s uniqueness and core competitiveness should be one-of-a-kind—at least irreplaceable and uncopiable within a certain area. Change and innovation are always the themes of this era. No matter when, don’t treat past experience as the future. Experience is for reference; the future is for innovation.

The future is already here. With the right approach, tourist attractions remain worth paying attention to and can be one of the industries that create quick miracles.

Three Core Business Segments under Wenlv Gang

——Community and Training: With over 50 communities and 20,000+ professionals in the cultural tourism vertical industry, we leverage strong community traffic to build a multi-dimensional interactive learning and exchange platform featuring “media communication + online micro-courses + offline training + project visits + industry summits.”

——Secondary Consumption Product Investment: Indoor snow parks, creative light shows, and parent-child trains are the three major types of secondary consumption products Wenlv Gang first promotes. We adopt an investment joint venture and profit-sharing model with cultural tourism attractions, reducing their investment pressure, driving iterative upgrades of secondary consumption products, and helping attractions establish a long-term operational revenue mechanism.

——Scenic Area Operation and Management: Quickly generate 10 to 30 million RMB in cash flow for scenic areas before opening, build official operational and marketing platform systems, and address the sales challenges on non-holiday weekdays from Monday to Friday. We provide systematic services including pre-opening operational consulting, operational plan development and execution, opening event planning and execution, training support, and 1-3 years of operational guidance, forming a comprehensive cooperation structure.

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