Why Experience Tourism Is Rewriting the Rules of the Travel Business
The CEO of a travel management group appears on television to discuss industry trends and, within the first few minutes, says something that should make more than a few industry executives uncomfortable: demand is not changing destination, it is changing its very reason for being. Abel Zhao, CEO of the CSTS Enterprises group, described to CNBC how experience-led travel is displacing traditional demand patterns. He did not say it as an academic observation. He said it as someone who manages the real pressure of adapting a business model when the ground is shifting beneath their feet.
What Zhao articulates has a name in the industry: experiential tourism. But naming it is not enough. The mistake that many operators make is treating this phenomenon as a product category when it is, in reality, a structural shift in how the traveler assigns value. And that shift has direct consequences on margins, distribution models, and the long-term viability of companies that still think in terms of seats sold and hotel nights occupied.
When the Destination Stops Being the Sales Argument
For decades, the mass travel business model operated on a simple premise: the traveler wants to go somewhere, and you sell them the means to get there. The destination was the product. Operators and management agencies organized around that geography: fares, hotels, transfers. The efficiency of that model depended on volume and standardization.
What Zhao describes points to an inversion of that model. The traveler of 2026, particularly in younger segments and in expanding markets such as China, does not start from a destination. They start from an experience they want to have, and then seek out the place where that experience exists with the greatest intensity. McKinsey data gathered in this analysis cycle shows that 52% of Generation Z travelers allocate priority budget to experiences, compared to 29% among older generations. That is not a marginal preference: it is a redistribution of where value is captured in the travel chain.
For a management group like CSTS, this has concrete implications. If the core product is no longer transportation or accommodation but rather access to a curated experience, then the operator who continues to optimize their business around airfares and hotel contracts is selling the packaging when the customer has already bought for the content. The margin migrates toward whoever controls the curation, the authenticity, and the capacity to connect the traveler with something they cannot replicate at home.
This also explains why the conversation about the energy shock that Zhao introduces is not merely macroeconomic. Volatility in fuel prices hits disproportionately hard at operators who built their efficiency on volume and standardization. Those who diversified toward high unit-value experiences have a different cost structure: less dependence on seat pricing, greater capacity to shift value toward activities, local gastronomy, and specialized guides. The experience absorbs price in a way that a flight simply cannot.
China and the Sector's Most Demanding Laboratory
Zhao mentions demand patterns in China with a particular attention that is far from coincidental. The Chinese travel market has followed a trajectory that no other market replicates with any precision: severe contraction during the pandemic years, controlled reopening, and then pent-up demand that entered the market with preferences already transformed by years of deprivation and by pressure on disposable income. The post-pandemic Chinese traveler did not return to the previous pattern. They arrived with more selective criteria and, paradoxically, with a greater willingness to pay for experiences they consider irreplaceable.
What makes this scenario interesting for organizational analysis is not just the consumption trend. It is the speed with which that market forces operators to make decisions. In an environment where the Chinese traveler is prioritizing experiences in emerging destinations, where domestic tourism competes with international travel, and where local digital platforms mediate every stage of the decision-making process, travel management groups must simultaneously resolve questions of product, channel, and positioning. That simultaneity is where leadership models are truly tested.
The question I find most relevant is not what trends Zhao sees, but what internal conversations those trends are forcing within his organization. Because the movement toward experience as the axis of the product is not painless for a company built on transaction management. It involves reviewing competencies, supplier relationships, incentive structures, and, frequently, the way in which leadership has until now defined success. None of those adjustments happen without internal friction. And most of that friction does not appear in television interviews.
What the Market Reveals About Who Has the Structure to Survive
American Express Travel published its trend analysis for 2026 with a diagnosis that converges with what Zhao expresses: travelers are prioritizing unsaturated destinations, local gastronomic experiences, and travel decisions that begin with the activity rather than the geographical destination. Skift Research adds that exploration, cultural learning, and the search for new activities account for more than 60% of the stated motivations in short trips and guided circuits. This is not a niche. It is the market's center of gravity.
For travel management groups, that displacement has a consequence that is rarely named with clarity: traditional intermediation loses its margin justification. If the traveler can find and book a local experience directly through specialized platforms, the operator who only adds logistical value in transportation and accommodation is compressed. Their survival depends on whether they can build value in the curation layer: selection, context, exclusive access, and the articulation of a coherent travel narrative.
That is a different business altogether. It requires deep relationships with local operators in emerging destinations. It requires talent with cultural sensitivity, not merely booking managers. It requires investing in territorial knowledge that does not scale in the same way as an automated reservation system. And it requires, above all, that the organization's leadership understands that it is migrating from an efficiency business to a judgment business. That migration carries a real transformation cost, even if it does not always appear on the balance sheet under that name.
What I find most revealing about Zhao's discourse is not what he says about the market, but the position from which he says it. A CEO who reads trends clearly on television is doing something valuable: signaling. But outward signaling only makes sense if the internal organization has already embarked on the journey that signaling promises. The distance between the public diagnosis and the internal transformation is the space where more strategies are lost than are won.
The Leadership That Experiential Tourism Demands and Few Companies Are Willing to Pay For
The transition toward an experience-centered model does not fail due to a lack of vision at the C-Level. It fails, more often, because the organization does not have timely conversations about what that change means for specific people, established processes, and existing incentives. An operator that has spent twenty years optimizing the relationship between fares and margins has teams, systems, and cultures built around that optimization. Asking them to migrate toward experience curation without simultaneously redesigning incentives, competencies, and reporting structures is asking them to run a different race wearing the shoes from the previous sport.
Skift documents this problem indirectly when it points out that mass tourism operators face obsolescence if they do not migrate toward models of local authenticity. That word, obsolescence, carries a weight that deserves to be taken seriously. It does not imply immediate disappearance. It implies a gradual erosion of relevance while the market reorganizes itself around propositions they did not build.
The difficulty for the leaders of these groups is not intellectual. It is organizational. Knowing that change is necessary and getting the organization to change are two processes that do not occur in parallel automatically. The first is analytical work. The second is leadership work, with its frictions, its resistances, and its internal political costs. And that work is rarely resolved with a television appearance, however well-argued it may be.
What experiential tourism is placing on the table, beyond consumer trends, is a question of organizational maturity: how many companies in the sector have the willingness to review their business model with the same clarity with which they describe market trends. Because precise diagnosis about the external environment, without the same precision applied internally, produces organizations that know where the world is heading and continue doing what they have always done.
Zhao articulates with coherence what the market is asking for. The real test does not lie in the analysis he offers publicly, but in whether CSTS Enterprises already has the structure, the talent, and the processes to capture the value that analysis describes. That is the gap that does not appear on the screen.
