Chinese tourists are now the biggest holiday spenders in the world. In 2012, 83 million Chinese spent a mind-boggling $102 billion on traveling, well above American's $83.5 billion. Furthermore, each year more and more tourists visit China. Industry experts predict that by 2020 the country is likely to become the world's largest tourist destination. In the past ten years, the number of foreign tourists increased from eight million to 48 million.

These trends mean big business for China. Retail investors can also get their share of the travel boom by investing in stocks with heavy exposure to the tourism industry. As the largest consolidator of airline tickets and hotel rooms in China, one-stop travel service International (NASDAQ:CTRP) is set to benefit enormously from the tourist boom. One of China's top three airline stocks, China Eastern Airlines (NYSE:CEA), together with Home Inns & Hotels Management (NASDAQ:HMIN), a popular choice for domestic destinations, could also have plenty of upside. What's the best way to get exposure to China's tourist boom?


Source: Statista

Ctrip's competitive advantages are highly attractive
Online since 1999, Ctrip has become the leading travel service provider in the country. The company targets frequent independent travelers, a fast-growing segment that has been traditionally under-served in China. Furthermore, by offering one of the most complete hotel guides and fast customer service, Ctrip has managed to build pricing power despite increasing competition from Priceline and Elong.

The best part of the story is that Ctrip has plenty of growth catalysts left. First, the tourism boom is set to improve the company's long-run top-line performance. Furthermore, considering that call centers still handle half of the company's travel reservations, operating profit is set to increase as Ctrip continues making progress with the automatization of its booking system. Perhaps this is why Jiong Shao, head of China strategy at Macquarie Securities, considers Ctrip a top pick for next year.

China Eastern Airlines will benefit from increasing domestic demand for flights
Up 12% in the past month, China Eastern Airlines is China's second-largest carrier by passenger numbers.

With a fleet of more than 300 aircraft the company serves over 150 destinations, including 120 throughout China, from its hub in Guangzhou. Considering that in 2012 domestic revenue per passenger kilometers comprised 70% of total traffic, the company could benefit enormously from a long-term increase in domestic demand for flight tickets. 

Notice that the company targets the emerging middle class by providing cheap tickets, and offers great customer support. It was recognized as one of the 50 most valuable Chinese brands by WPP in 2012.

Why Home Inns & Hotels Management is up 33% since May
Home Inn was the first budget hotel chain established in China in 2002. The company now manages more than 1,900 leased and franchised locations in 271 cities, and has become one of the best known hotel brands in the country.

According to the latest earnings call the company is experiencing top-line improvement, and it is also becoming increasingly profitable. In the latest quarter revenue increased 11% year-over-year, while adjusted net income increased 29%.

This is consistent with the ongoing domestic demand shift to economy hotels. In 2011, economy hotels occupied 33% of the total demand for hotels, up 25 percentage points since 2005. Furthermore, the combination of a leased-and-operated business model with a franchised model provides the company with balanced revenue growth and margin expansion.

Final Foolish takeaway
China's tourists have become the biggest tourism market in the world. Moreover, the country is set to become the most popular tourist destination by 2020. From investing in online travel agencies, to getting exposure to the ongoing internal demand shift to economy hotels, China's tourism boom brings several attractive investment opportunities to the table.

Adrian Campos has no position in any stocks mentioned. The Motley Fool recommends International and The Motley Fool owns shares of Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.