China Trading Desk forecasts US$23bn opportunity for global travel retail

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By TRBusiness Editor

Published on February 24, 2026

China Trading Desk (CTD) has released its latest China outbound travel outlook, based on newly published 2025 official travel spend data and its own destination-level travel retail modelling.

CTD estimates that Chinese residents generated US$254bn in outbound travel spend in 2025 across around 167.5 million trips, based on a National Infrastructure Assessment (NIA) crossings-to-trips framework.

For 2026, CTD projects 175 million outbound trips and a total outbound spend of US$280bn. Of this, US$23bn is expected to flow through airport and duty free/travel retail channels, with a further US$56bn allocated to non-travel-retail shopping.

Encouragingly, in CTD’s Q4 survey, 64.45% of respondents said they are likely or very likely to shop at airport travel retail.

For brands and airport retailers, the key takeaway is that China outbound demand is returning with clear retail intent – but performance will vary significantly by corridor.

China Trading Desk: channel mix is key

Shopping remains one of the largest discretionary components of travel spend. For GTR, the critical factor is not just overall shopping volume, but channel mix. CTD’s Q4 survey indicates that travellers who already shop downtown and at airports are the most convertible segment for travel retail.

Beauty and fragrance show the strongest purchase intent, while travellers who rarely shop when abroad remain the main headwind. According to CTD, around 72% of frequent travellers say they are likely or very likely to shop in airport travel retail, versus approximately 51% of first-time travellers.

Based on CTD’s modelled travel retail spend for FY2026, the top five destination markets by value are Japan (US$2.09bn), Hong Kong (US$1.33bn), Macau (US$1.24bn), South Korea (US$1.13bn) and France (US$0.56bn).

Northeast Asia dominates value creation, while Hong Kong and Macao lead in traveller volume, reflecting the scale of cross-border flows within the Greater Bay Area.

Japan ranks as the largest travel retail value destination in CTD’s 2026 upper-bound scenario, combining solid arrival volumes with high shopping intensity and strong duty-free conversion. This market is positioned for premium assortments, exclusives, gifting sets and pre-trip “reserve & collect” activation.

Hong Kong and Macao are earmarked as the highest-volume corridors, with projected arrivals of around 39 million and 30 million respectively. These markets favour high-frequency execution, price ladders and replenishment-led categories.

South Korea represents a high-conversion corridor, generating US$1.13bn in projected travel retail spend on around 6.5 million arrivals. Beauty, fragrance and giftable formats remain central, with airport execution and promotional mechanics playing a decisive role in share gains.

France enters the top five despite relatively modest arrival volumes, reflecting higher basket sizes associated with long-haul travel, and the importance of airport-led retail at departure and return.

CTD Founder & CEO Subramania Bhatt commented: “Trade press headlines often focus on ‘trips are back.’ The bigger story for brands is that retail behaviour is back – and it’s uneven by corridor. Our 2026 outlook is designed to be demographic-ready, showing where the travel retail value pools sit, which destinations drive volume, and where conversion strategies should differ.”

Importantly, CTD advises brands to adopt a corridor-first approach, rather than a single China outbound strategy.

“Our model reconciles to SAFE’s newly released macro benchmark, then translates it into a corridor-by-corridor view that GTR teams can plan against — including travel retail vs non-travel retail shopping splits and conversion signals,” Bhatt added.

*Sources: State Administration of Foreign Exchange (SAFE) Balance of Payments (travel debit, FY2025); CTD China Outbound Travel Arrivals Spend Model; CTD China Outbound Q4 Travel Sentiment Survey.