Transforming China's Tourism Industry: The Impact of Industrial Integration on Quality, Performance, and Productivity

The global tourism industry has witnessed significant growth, with China emerging as a powerhouse in this sector. However, China's tourism faces challenges related to service quality, market organization, technology adoption, and market share loss. To address these issues, there is a growing consensus between the government and the industry to promote high-quality tourism. This paper explores the phenomenon of industrial integration, where boundaries between sectors within the tourism industry blur, leading to the emergence of new collaborative models and novel forms of tourism. While previous research has primarily focused on the economic impacts of such integration, this study delves deeper into its effects on quality development, using empirical data at the enterprise level. The findings reveal that industrial integration has a substantial positive impact on the performance and productivity of Chinese tourism companies. Companies embracing integration strategies exhibit better financial performance, as evidenced by higher returns on equity (ROE) and total factor productivity (TFP). These integrated firms demonstrate improved financial strength, profitability, and overall operational efficiency. Unexpectedly, the study uncovers the significant role of residential tourism consumption in integration rates, highlighting the complex relationship between local demand and industry dynamics. The implications of this research extend to industry leaders and policymakers, advocating for a transformative approach to integrated tourism. It emphasizes the potential of cross-sectoral collaboration, digital technology adoption, talent development, and policy support in enhancing performance and sustainability. The study's insights empower stakeholders to contribute actively to the future of China's tourism industry, fostering a holistic and sustainable approach to integration that benefits all stakeholders. This research contributes to a deeper theoretical understanding of integration's dynamics, enriching the discourse on the interconnected factors driving integrated tourism models.