In the past decade, Chinese tourism’s total revenue saw double-digit annual growth.1 Just before COVID-19 shocked the industry, the country’s 6 billion domestic and 155 million outbound trips from mainland China generated around $1 trillion in travel spend. This propelled China to the top of global rankings for domestic tourism spend and outbound traveler numbers.
This article is a collaborative effort by Monica Li, Spencer Liu, Steve Saxon, Jonathan Woetzel, and Jackey Yu, representing views from McKinsey’s Travel, Logistics & Infrastructure practice.
Now, confidence in post-pandemic tourism recovery is growing. Chinese travelers are still yearning to travel—and with domestic and international reopening policies in place, tourism’s recovery is on the horizon.2
In a new report, The path toward eco-friendly travel in China, McKinsey, Accor, and Trip.com Group explore how the Chinese travel industry impacts the environment and spotlight actions that travelers, tourism providers, and industry stakeholders could take to achieve real sustainable travel. As China’s tourism bounces back, it is more urgent than ever to tackle the industry’s contribution to environmental damage. Given tourism’s diverse stakeholders and activities along its value chain, it is easy to overlook the environmental footprint of individual actors. Their combined impact, however, is substantial.
With its huge traveler numbers and market size, Chinese tourism can play a critical role in advancing the sustainability agenda.
To take stock of the combined environmental impact of individual stakeholders, the report examines the carbon emissions, water consumption, and waste generation that tourism was responsible for in 2019.3 That year, mainland China’s domestic tourism generated approximately 800 megatons (Mt) CO2e. This accounts for about 6 to 8 percent of overall emissions in China, of which about 50 percent are direct emissions (Exhibit 1).
Domestic tourists in mainland China also consumed between 7 and 8 billion cubic meters (m3) of water, with accommodation accounting for about 50 percent of this. Domestic tourists in mainland China generate between 12 and 14Mt of solid waste annually.
To put these numbers into context, consider the environmental footprint of one tourist trip—in this case a three-day round trip by air between Beijing and Shanghai. In this scenario, the traveler takes a private car to the airport and, after the flight, catches a taxi to their hotel. During the three-day hotel stay, the traveler uses and discards the single-use consumables provided by the hotel, including water bottles, soap wrappers, and combs. The traveler showers every morning and enjoys one bath on their last night. Towels are washed and replaced daily, and the bedsheets are changed once. For meals, the traveler eats breakfast at the hotel, and dines out for lunch and dinner, leaving behind a small amount of leftover food per meal. As the traveler sightsees and shops, they acquire disposable plastic packaging, discarding these immediately after use.
The total direct emissions from this trip add up to approximately 330kg CO2e. Direct water consumption is around 1,200 liters, and this traveler generates about 5kg of waste during their stay (Exhibit 2).
This three-day trip illustrates how finite actions can add up to intensify the environmental footprint of each traveler. Though there is a clear need to accelerate a transition to sustainable travel, travelers also need to be on board with the shift to see any real improvements in sustainability.
Chinese travelers could be instrumental in the shift toward sustainable travel. Understanding their sentiment is a crucial step in unlocking simple but meaningful behavior changes. McKinsey’s latest survey results show that Chinese travelers are aware of sustainability but are not yet willing to pay a premium for more sustainable products or services (Exhibit 3).4
Chinese travelers, however, also believe that sustainable tourism is a shared responsibility and indicate that governments and tourism providers have a prominent role to play in supporting the transition (Exhibit 4).
As they start to look for sustainable travel options, these travelers expect online travel providers to assist them with their search (Exhibit 5).
Taken together, these factors suggest that the tourism industry could harness this intent and empower Chinese travelers to reduce their environmental footprint. Sustainable tourism is indeed a joint effort, but what can tourists do to champion climate-friendly travel?
Domestic tourists can change their habits to effect immediate change in their environmental footprint. For instance, travelers can make the following choices as they plan and execute their itinerary.
To see this in action, let’s revisit the three-day trip from Beijing to Shanghai. If that traveler had adopted sustainable behaviors and habits, on that trip they could have reduced carbon emissions by 45 percent, decrease water use by 25 percent, and cut waste by 65 percent. Though individual actions could significantly reduce overall environmental impact, relying on traveler behavior alone is only the first step; individual tourism providers can support travelers in choosing sustainable options.
When individual tourism providers make sustainable changes to their operations, they can reduce their overall footprint. As a result, travelers will have more sustainable options to choose from—if these options are made visible.
As the first stop for planning a trip, travel agencies are well positioned to educate consumers on sustainable travel. Travel agencies could use their existing rewards programs, platforms, and new technologies to help travelers plan their trips more sustainably. Providers could also use clear labeling and provide tools like personal carbon credit accounts, helping travelers to understand the effect of their choices on the environment.
Air travel is often the largest source of emissions for any trip. As travelers embark on their journeys, airlines could employ data analytics to tackle emission reduction. Sustainable technologies could combine flight, environmental, and other external data to predict the optimum amount of fuel needed for a flight. Sustainable aviation fuel (SAF) has also been identified as a promising next step in reducing fuel-based emissions. Airlines may also consider collaborating with suppliers on issues such as transparent carbon reporting, monitoring, and decarbonization—helping to reduce emissions across the supply chain.
At the destination, hotel operations contribute disproportionately to the industry’s overall energy use, water consumption, and waste generation footprint. Hotels could revisit their operations management and find opportunities to leverage new smart technologies to monitor, plan, and reduce their consumption and waste. Switching to renewable energy sources could also further diminish carbon emissions, while upgrading infrastructure and keeping up with maintenance may prevent excess energy loss and waste.
Many more travel providers, including asset owners, car rental services, and tour operators could play a part in shaping the future of sustainable travel, but long-term change requires joint action from the entire travel industry.
Travelers and tourism providers could help the travel industry realize the “quick-wins” of sustainable impact. Lasting sustainability improvements, though, will take concerted industry-wide effort.
While the premium that a traveler is willing to pay for sustainable travel is markedly lower than the cost of providing it, the industry will likely need to consider covering the costs of sustainable transition. The travel industry could add weight to its sustainability intentions by collectively agreeing to minimum sustainability targets. Further credibility could be added to sustainability claims if a unified, industry-wide sustainability rating system were established. A centralized rating system could focus on defining and measuring environmental impact, allowing travelers to make informed choices.
Aligning the motivations of stakeholders within the tourism industry’s complex structure could also amplify the transition toward sustainable travel. This could be done by including sustainability in regulations and wider industry standards that affect the interests of all parties. Including more mandatory sustainability criteria in the star rating system of hotels, for example, could bring the motivations of both hotel owners and operators into alignment.
Though certain sustainability technologies and solutions such as SAF are available, this is not enough to support industry-wide adoption, and supply is limited. Leading industry actors could help solve demand-supply deadlock and boost supply scale-up by forming a first-mover coalition and committing to adopting sustainable solutions. Adoption could become more affordable through funding programs, especially where smaller actors may be less likely to afford the upfront investment.
Where industry actors do not have enough information to successfully adopt sustainable measures, the industry could aim to bridge actors’ knowledge gaps by hosting platforms that distribute information and match providers’ needs to key sustainable technologies and funding opportunities.
When diverse voices are aligned, combined action across the travel value chain could bring the travel industry significantly closer to the future of sustainable travel.
In a possible future, each stage of a traveler’s journey could include numerous elements that reinforce climate-friendly travel and encourage sustainable behaviors (Exhibit 6). From the beginning of the journey when the traveler becomes inspired, researches, and books a trip, sustainable offerings are visible and accessible. Throughout the journey, all activities and facilities are geared toward reducing emissions. Emissions from transport, especially aviation, could be minimized by transport providers switching to clean fuel or adopting hydrogen powered shuttles, electric autonomous vehicles, and electric vertical take-off and landing (eVTOL) flights—these technologies having matured from today’s small-scale innovators through industry-wide co-development efforts. In addition to purchasing green electricity, accommodation providers could collectively commit to installing renewable energy on site.
The largest proportion of waste generation and water use occurs in hotels and restaurants. In this future scenario, a circular model would ensure that materials are recycled, and water is not wasted. Waste sorting facilities could be onsite in locations with high food and material consumption, such as hotels, restaurants, shopping malls, and airports. Urban farms could compost food waste for fertilizing vegetables and crops, and hotels could have collection and purification systems for gray and rainwater. Adoption of these solutions could be funded by financial mechanisms designed to support sustainability projects. Furthermore, all buildings would be designed to be non-intrusive and take environmental consequences into account.
The Chinese tourism industry is large enough to take the lead in advancing the sustainability agenda. As travelers resume their adventures post-COVID-19, each step of their journey presents opportunities to make small choices—actions that could immediately reduce their environmental footprint. But the onus is not on the traveler alone. Long-term change calls for collaboration between actors across the entire travel industry, from hotels and travel agencies, to green investors and technology suppliers.
Monica Li is a consultant in McKinsey’s Beijing Office, Spencer Liu is an associate partner in the Hong Kong Office, where Jackey Yu is a partner; Steve Saxon is a partner in the Shenzhen Office, and Lola Woetzel is a senior partner in the Shanghai office; Brune Poirson is the chief sustainability officer at Accor, where Gary Rosen is the chief executive officer Greater China; Ray Chen is the senior vice president of Trip.com Group and CEO of Accommodation Business.
The authors wish to thank Carrie Chen, Zi Chen, Margaux Constantin, Giuseppe Genovese, Yanran Guo, Lili Li, Esteban Ramirez, Shashank Singh, Mingming Sun and Cherie Zhang for their contributions to this report. They also wish to thank Christophe Lauras, Violet Jiang, Ken Wong, and Vivian Yeh from Accor and Richard Beh and Quanwu Xiao from Trip.com Group for their contributions to this report.