China’s travel agents are rebuilding their outbound business with a blend of old-school connections and new-age tech. The pivot to AI and the renewed interest in Europe aren’t just trends, they’re a response to how traveler expectations have changed.

China’s travel agencies are embracing artificial intelligence at a rapid pace, but not without reservations.

A new Dragon Trail Research survey of 280 outbound travel agents, releasing Wednesday, shows that 82% of respondents already use AI in their daily operations. But many say the tools still lack the precision and nuance needed to fully meet expectations.

Agents said they mostly rely on AI for itinerary planning, translation, content suggestions, virtual travel assistants, and customer service. AI is also being used to manage bookings and customer data. Tasks like translating menus or suggesting local transport options are helping staff focus on what travelers increasingly demand: personalized service.

Where AI Still Misses the Mark

Despite its widespread use, agents point to several areas where AI falls short. Translation tools, for instance, often misinterpret dialects or fail to capture tone and context. That can be a problem when communicating nuanced travel information.

“It would be even better if the system could intelligently tag and tally every place a guest has already visited, then automatically filter those out when making new recommendations – no repeats, just fresh ideas,” one agent said in the report.

Itinerary planners, another popular use case, are seen as too rigid. Agents said they want more weather-aware suggestions and itinerary recommendations that are tailored, not just cookie-cutter templates.

For the 18% of agencies that haven’t yet adopted AI, the hesitation is tied to functionality. Over half of non-users said they want better translation and more intelligent customer service tools before making the leap. Many are waiting for the technology to mature before committing.

Source: Dragon Trail Research

Outbound Travel Rebounds, Cautiously

The report also provides a pulse check on China’s outbound travel market, which continues its slow rebound following the pandemic.

More than 60% of agents said business so far in 2025 has improved compared to last year. But the optimism is tempered as 17% reported that conditions have become more difficult. The reasons? Economic instability, global conflicts, and a widening gap between traveler demands and what smaller agencies can deliver.

A noticeable trend this year is the increased focus on older travelers. In the July survey, 23% of agents said they were selling to the senior market, up from 14% in January.

While East Asia and Western Europe are the top two sub-regions with the most travel agencies selling tours and the best sales performance, Central Asia and some lesser-known South American countries are drawing attention for those seeking something different.

Source: Dragon Trail Research

Europe Is a Top Seller, But Engagement Lags

Interest in European travel is clearly growing. Agents now rank Western Europe just behind East Asia for both product availability and sales performance. France, the UK, Switzerland, Iceland, and Italy are seen as offering the most potential.

Yet, the marketing doesn’t always match the interest. Only 35% of surveyed agents said they had attended any promotional events for European destinations in the past two years, and all of those were for Western European countries.

Agents are asking for more support. They want up-to-date materials on cultural and historical attractions, safety, transportation, and local customs. Since Chinese tourists tend to visit multiple countries on one trip, multi-country itineraries are in higher demand than single-country ones.

The clients traveling to Europe are younger, mostly those born in the 1990s and 2000s. Couples and families with mid-range budgets dominate, and most want customized or independent travel options rather than group tours.

Personalization Isn’t a Bonus, It’s Expected

The most defining shift in China’s outbound travel market is the demand for personalization. The era of one-size-fits-all travel is over.

Agents say travelers now want experience-driven, customized trips. Study tours, themed itineraries, and off-the-beaten-path destinations are viewed as growth areas.

But this is putting a strain on smaller agencies, which may lack the tools or staff to keep up with such fragmented preferences.

The trend toward personalization is most visible in the types of travel being sold.

Small group tours, typically for 10 to 20 people, have become the most commonly sold and best-performing product. Family travel and high-end customized packages are also strong sellers. Gen-Z and affluent travelers, in particular, are driving this shift toward tailor-made experiences.