Impact Assessment of Inbound Tourism Recovery and Visa-Free Policies on Leading Duty-Free Consumption Enterprises

According to the provided data from Xiamen Port, the annual number of inbound and outbound passengers exceeded 6 million, a year-on-year increase of nearly 20%. Among them, foreign passengers exceeded 1.1 million, and visa-free and 240-hour transit visa-free passengers reached 380,000, a year-on-year increase of nearly 35%. This strongly reflects the recovery trend of inbound tourism, and the optimization of visa-free policies has significantly improved the entry convenience and visit frequency of foreign customer groups. For duty-free retail enterprises mainly targeting overseas shoppers, the increased stay time and visit frequency of inbound tourists at shopping destinations will directly expand the foot traffic base and disposable consumption potential.

Leading duty-free enterprises represented by China Duty Free Group have core value chains including airports, ports, and domestic duty-free stores. Their revenue is highly dependent on the per capita consumption amount and foot traffic of duty-free shopping. The recovery of inbound tourism and the improvement of visa-free convenience can drive performance in the short term through the following mechanisms:

• Foot Traffic Growth
  : Foreign and mainland tourists tend to gather in key ports/tourist cities due to visa convenience and opening policies, directly increasing the number of visits to airports and duty-free stores.
• Average Customer Spending Increase
  : Tourists generally purchase high-priced items such as luxury goods and daily chemicals in duty-free stores. An increase in the proportion of inbound tourists will push up the overall average sales amount.
• Channel Effect
  : Port and island duty-free stores are usually tied to air travel and vacation scenarios. Tourists’ perception of the ‘visa-free + duty-free’ combination is enhanced, which helps promote rapid conversion and high-frequency repurchases (especially when the visa-free period is extended, tourists can shop multiple times before returning).

Leading duty-free enterprises usually have dense store networks and existing supply chains, with relatively low marginal costs. New foot traffic drives significant net profit elasticity. If visa-free policies continue to expand and stabilize—such as more cities or ports joining visa-free/transit visa-free—it will:

1. Increase sales density of existing stores
   , especially airport counters with high marginal contributions;
2. Reduce the payback period of new stores
   : new port projects can quickly attract overseas tourists;
3. Strengthen member systems and CRM
   : convert short-term tourists into regular buyers through precise marketing.

Despite the optimistic trend, attention should still be paid to:

• Policy Dependency
  : If visa-free policies are adjusted due to epidemic, geopolitical, or security reasons, the recovery of foot traffic may be interrupted. It is necessary to closely observe the stability of policies after implementation.
• Exchange Rates and Overseas Consumption Substitution
  : If the RMB depreciates, although it is expected to attract more tourists, it may also lead to a reduction in per capita spending on domestic tourism.
• Competitive Landscape
  : Other duty-free operators, cross-border e-commerce, and duty-free policies in Hong Kong and Macau are also being optimized simultaneously, which may dilute marginal market shares.

Overall, the recovery of inbound tourism combined with the optimization of visa-free policies can significantly enhance the performance elasticity of leading duty-free consumption enterprises such as China Duty Free Group: the recovery of foot traffic drives revenue growth, and the high marginal profit rate makes the net profit increase more significant. It is recommended to focus on the following directions:

• Focus on sales and foot traffic data of stores corresponding to ports where visa-free policies are implemented (such as Xiamen, Hainan, etc.)
  : to determine the real incremental contribution;
• Observe changes in the structure of foreign and domestic tourists
  : to evaluate the proportion of high-spending groups;
• Continuously track the long-term sustainability of policies and competitors’ responses
  : to dynamically adjust investment judgments.

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