If you’re running a hospitality business – perhaps a hotel, travel resort, or restaurant – you wouldn’t be the first to consider tapping into China’s consumer base to grow your business.

Entering the Chinese market in any capacity can offer significant opportunities for global hospitality businesses, with its massive population and growing economy. However, it’s also important to be aware of challenges like regulatory hurdles, partnerships, and the need for adaptability.

In this guide, we’re breaking down some of the key opportunities and reasons to consider China for your hospitality business – whether establishing a physical or digital presence in the market – while also highlighting some of the challenges to bear in mind.

TL;DR: China’s giant population, surging tourism (at home and abroad), and app-loving travelers make it a hotspot for hospitality businesses. However, it’s important to stay mindful of regulations, cultural mismatches, and a unique digital ecosystem as well as other challenges. Whether expanding on the ground or capturing Chinese travelers online, China presents a major opportunity—but success requires strategic adaptation to a market unlike any other.

What are the biggest opportunities for hospitality businesses in China in 2025?

1. Take advantage of the massive, and growing, domestic tourism market

China has one of the world’s largest domestic tourism markets. In 2024, domestic tourism spending reached trillions of yuan. In 2025, this trend is likely even stronger as the middle-class and affluent consumer population continues to grow. China recorded a historic 9.02 billion domestic trips during the 40-day Lunar New Year travel rush in 2025, surpassing last year’s 8.4 billion, according to state media Xinhua.

Opportunity for physical expansion: For hospitality businesses who open branches within China, there are opportunities to cater to the growing domestic demand by opening new hotels, restaurants or resorts in high-traffic areas. “Tier 1” cities like Shanghai and Beijing, as well as “New Tier 1” cities like Chengdu and Hangzhou, are hotspots for domestic and inbound travelers.

2. Attract outbound tourists to your existing business

Chinese outbound tourism is continuing to grow in 2025 due to pent-up demand from post-COVID reopening, shifting preferences among younger travelers, improved travel infrastructure, social media influence, as well as a number of other factors.

The first half of 2024 saw a 50.4% year-on-year increase and by 2028, the number of outbound trips from China is predicted to reach 200 million.

Opportunity for physical expansion: A presence in China allows global hotel and travel brands to build loyalty among Chinese travelers, encouraging them to choose the same brand when traveling abroad.

Opportunity for digital outreach: For hospitality businesses looking to attract Chinese travelers, having a digital presence – a fast and functioning website, China-specific marketing strategy, Baidu SEO – puts you ahead of other global competitors. This is because unless a China-specific strategy has been implemented, many global competitors might not have a strong digital presence in China by default.

3. Appeal to a growing affluent population

China’s emerging middle-class and affluent consumer (MAC) population is projected to reach 80 million people by 2030, with a significant portion of high-net-worth individuals (HNWIs) seeking luxury experiences.

Opportunity for physical expansion: Luxury hotels can tap into the affluent segment with high-end offerings, such as spas, fine dining, and exclusive experiences. Meanwhile, mid-tier brands can target the expanding middle-income earners with affordable accommodations, especially in business hubs or tourist destinations like Xi’an (Terracotta Warriors) or Guilin (scenic landscapes).

Opportunity for digital outreach: Global hotel brands can seek to attract this segment via digital channels optimized for Chinese consumers. Target these segments with tailored online campaigns, like premium packages on Fliggy or Douyin.

4. Align with government-led tourism support initiatives

The Chinese government is fueling the travel and hospitality industry with a mix of policy tweaks (e.g., visa relaxations to attract international visitors), infrastructure upgrades (e.g., high-speed rail and new airports), and targeted incentives (e.g., coupons and discounts), aiming to make travel easier, more appealing, and economically rewarding for businesses and local economies alike.

Opportunity for physical expansion: Hotels can strategically locate properties near upcoming infrastructure developments to capture new travelers. For example, Hainan Island, marketed as "China’s Hawaii," benefits from tax-free shopping policies and is a prime spot for resort development.

5. Optimize for digital-first consumers

Chinese consumers are highly digital, relying on platforms like Ctrip, Fliggy, and WeChat for travel bookings and reviews.

Opportunity for physical expansion: Hotels and other hospitality businesses can leverage local platforms for marketing and distribution, offering promotions or partnering with influencers (KOLs – Key Opinion Leaders) to reach younger demographics like Gen Z travelers.

Opportunity for digital outreach: Global brands can leverage Chinese apps and marketing tactics, including similarly targeted promotions or KOL partnerships, as part of a China marketing strategy to attract outbound tourists to their business.

Optimizing Your Hospitality Website for China

6. Maximize on unique cultural and seasonal opportunities

Events like Chinese New Year, Golden Week holidays (e.g., National Day in October), and regional festivals drive travel spikes.

Opportunity for physical expansion: For example, hotels can create themed packages or events tied to these periods and create authentic cultural immersion (e.g., stays in restored courtyard homes (siheyuan) or near UNESCO sites like the Great Wall).

Opportunity for digital outreach: Brands outside of China can still advertise seasonal deals to Chinese travelers, tying your global properties to their cultural calendar.

7. Cater for inbound and outbound business travelers

China remains a global manufacturing and tech hub, with cities like Shenzhen and Guangzhou attracting millions of business travelers annually. Professionals from China are also travelling more for business reasons, opening up opportunities for global travel businesses to capitalize on the surge.

Opportunity for physical expansion: Hotels can target professionals travelling into China with business-friendly amenities—conference facilities, high-speed Wi-Fi, and proximity to industrial zones or trade fairs like the Canton Fair.

Opportunity for digital outreach: Attract Chinese business travelers to your hotels or restaurants by marketing specific perks or trade-fair packages to Chinese execs traveling abroad.

In short, the Chinese market offers a blend of scale, growth, and strategic value that’s hard to ignore for a global hospitality business. Whether targeting leisure, luxury, or business travelers, the potential rewards justify the investment if executed with a deep understanding of local dynamics.

Entering the Chinese market also presents a range of challenges that require careful navigation. Here are some of the hurdles you might face and why they’re important to consider.

What challenges do hospitality companies face in China?

1. Navigating regulatory and legal complexity

If you’re establishing a physical presence in China, your business legally requires a recognized entity. The most common option for foreign companies is a Wholly Foreign-Owned Enterprise (WFOE), which allows you full control without mandating a local partner. China’s business environment is also heavily regulated, with rules on foreign investment, land use, and hotel operations. Other companies may elect to set-up a joint venture with a local entity.

Physical challenge: Setting up a WFOE, obtaining licenses, permits, and approvals can be time-consuming and opaque. For example, foreign companies may need to form joint ventures with Chinese firms, ceding some control. Partner with local experts to streamline legal and compliance processes.

Digital challenge: Your website and digital marketing must also comply with Chinese regulation. This could involve auditing your site for any content that may be non-compliant with China’s policies (e.g. online gambling, health claims, or adult entertainment).

Disclaimer: This guide is informational and does not constitute legal advice. Chinafy is not a legal or corporate advisory entity, and, given that every business is different, we suggest consulting with your internal legal counsel if you would like advice on any legal or compliance-related concerns, or alternatively we can connect you with one of our partners.

2. Adapting to cultural and consumer differences

Chinese travelers have unique preferences that differ from Western norms. For example, often a preference for group travel over solo trips, for familiar foods, and reliance on mobile apps for everything from booking to reviews.

Physical challenge: Misjudging preferences could alienate customers. For instance, a hotel lacking WeChat Pay options or failing to offer Chinese-language staff might lose business to competitors who adapt better. Localize your offerings by working with local professionals.

Digital challenge: Failing to tailor your website to cultural differences, including preferred payment options like WeChat Pay, or excluding China-specific booking apps from your go-to-market strategy could significantly impact your growth in the Chinese market. Localize your online presence through research or collaboration with local agencies.

3. Facing intense local competition

China’s hospitality market is crowded with strong domestic players, like Jinjiang International, Huazhu Group (H World), and BTG Hotels, alongside international brands like Marriott and IHG already established in the hotel space.

Physical challenge: Local brands often have cost advantages, established supply chains, and better understanding of regional markets. To break into the market, you’ll need a competitive pricing strategy, strong branding or niche differentiation, all of which can be facilitated by partnering with a local marketing agency.

Digital challenge: Outranking locals on Baidu or Ctrip can demand hefty ad spend, and more often than not, global websites fail to perform well in China. Partner with Chinafy to optimize your website for China, and gain a deeper understanding of how to approach the competition landscape via our trusted partner network.

Read our Baidu SEO Guide for Hospitality Businesses

4. Finding a place in China’s digital ecosystem

China’s digital landscape is dominated by local giants like Alibaba (Fliggy), Tencent (WeChat), and Ctrip, with little penetration by Western platforms like Google or Expedia.

Physical challenge: Integrating with local platforms can be complex with high commission fees, Mandarin-language requirements, and adapting to their algorithms. Engaging with local experts is one of the easiest ways to work out where to allocate your business’s time and efforts.

Digital challenge: In addition to listings on third-party apps, many websites, particularly global sites, often suffer performance issues, taking as long as thirty seconds to visually load if they even load at all. Chinafy can help you achieve near-native onshore performance, whether your site is hosted inside or outside of China.

5. Hiring and retaining local talent

If you’re establishing a physical branch in China, hiring skilled staff fluent in hospitality standards and bilingual in English/Mandarin can be tough, especially outside major cities. Labor laws are also strict, with requirements for social benefits and limited flexibility in layoffs.

Physical challenge: High turnover in the hospitality sector, combined with rising wages in urban areas, increases operational costs. Training staff to meet global brand standards while satisfying local guests adds another layer of complexity. Investing in retention and local hires is critical to succeed with a physical entity in China.

Digital challenge: Even if your business isn’t located within China, you may wish to consider hiring a local marketing team to manage your digital presence and ensure your brand’s reputation is established and maintained.

6. Establishing brand and localization

Western brands may face skepticism or lack recognition compared to trusted local names. At the same time, over-localizing risks diluting your global brand identity.

Physical challenge: Striking the right balance between brand consistency and localization can be difficult. For example, Chinese consumers might see a foreign hotel as prestigious but expect it to cater to local tastes—too little adaptation looks aloof, too much feels inauthentic.

Digital challenge: The same balancing act applies to digital marketing efforts – ads and other content must be localized to successfully engage Chinese consumers. As with other challenges, a recommended approach here is to partner with local experts to strike the right balance.

9. Dealing with supply chain and operational hurdles

Importing goods (e.g., furnishings, food) faces tariffs and delays, while local sourcing requires navigating a fragmented supplier network.

Physical challenge: Global brands often rely on consistent quality, but local suppliers may not meet standards, and import logistics are slowed by customs or regional disruptions (e.g., port congestion). It’s important to build flexible, local-leaning supply networks to overcome this challenge.

Expanding into China, whether online or offline, demands a well-researched, agile approach. From optimizing your website’s performance with Chinafy to working with local agencies for seamless localization—strategic partnerships can make the difference between struggling and thriving in this unique market. Ready to take the next step?

Some examples include Chinafy for web performance optimization or local Chinese marketing agencies for localization strategies.

Get in touch to see how Chinafy can support your China initiatives by making your website load fast and fully for consumers in China, and or connect you with agencies to help you localise your marketing strategies..