Because in their minds, cheaper is more cleverer, and the tour guide can probably offer a cheap price and promise wechat pictures of this, this and this, which is really what it's all about for them. And, I think the people who go on these stupid tours prefer to be herded like cattle, it's what they're used to.

  Also, And I've actually heard this said...  why deal with stuff like thinking about what you want to do and see when someone else can do it for you?

Tour companies don't make any money from the trip fee itself but from the spending of tourists. That is How they offer trip prices at very low prices to attract travellers. The tour guide and company make commission from the spending and so they take the tourists to famous places then to a few stores that will give them commission.

Saves the hassle of having to plan your own trip and paying the normal prices. I have been on a few and it isn't so bad but you are definitely expected to spend your money. The downside is they usually don't give you any free days for you to explore on your own.

Remember that normally, a tourist visa requires proof of a group tour package. What people don't think is that, once in the destination country, they don't have to stick with the herd. But! Chinese thinking is such that sticking to the herd is much easier than going on one's own.

And! Chinese logic being what it is, no one actually researches anything online and employs critical thinking when it comes to making an informed decision.

In home country, sometimes I just save energy to do research about the sites. I love to listen tour guide introduce the history events or story about sites, especially when I go on business trip, after trip, I get a few days free time. I dont have time to do research.I just sign up for a tour. But, it is true, travel market  has not been standardized, there are a lot cheat during a tour. As for commission, in foreign countries, tour guide also take you to shopping places, and get some percentage from your paying. I experienced that when I travel Europe (I joined foreign tour, I was unique Asian in that tour. )

Of course, we can explore more on our own. There are some group people who call each other 驴友 . They love to do research things about the destination.

It's a cultural thing that isn't necessarily bad. Imagine those millions of Chinese tourists truly doing whatever they wanted, getting into conflicts with their delusional attitudes. Sticking with a tour is probably the closest thing to being a well-behaved tourist in a culture where owning your actions (free choice and responsibility) is not learned.

Most of those package tours are better than the news extremes, I'm sure. The people know what they're getting in to, and all staff involved in the shopping tours make money from selling some overpriced trinkets, with a chance of selling a real piece of jewelry at a premium. Everybody should win. Even the poor and passive deserve a break from their regular routines, even if it's artificial and sad.

Now: Tour buses of Chinese in my country? I bloody hate them. When the cattle is disembarked, they block sidewalks and bike lanes, and won't move aside. Smoking, spitting, gawking and blindly walking around to snap photos as if they own the place. I have to cross the road to pass. But you only see them near big hotels and tourist spots.

What's this new article??

I found one from October that's on the front page, about something down in HK... and the Japanese tourist...

Anyway, as for why ppl go on tour groups - remember that this internet thing in China is relatively new. For many of the people who go on tour groups, they're not used to computers or interwebs... so just going through a tour group (with big fancy photos, smiling faces, and flashing lights) is obviously the best way to go - especially since the website of these places say that they are famous and the cheapest and best!!! And that counts for the mostest!

Because they are mindless sheep who need a shepherd.

They can't read maps .

You won't be able to get Tourist visa for Paki, India, Tajikistan, Afghanistan, Tibet and more, if you don't book trip with tourist guides before-hand.

I had an 'Invitation letter' from Tourist Agency in Gilgit, Pak, with outline of visiting spots this summer. I paid US$ 40 for it, and was denied Pak's  tourist visa in Beijing's Embassy. Original plan was to bus myself from Kashgar to Gilgit over Khorakoram pass, stay some 10 days in Gilgit with return to Kashgar same way. So, why do I need 'guides tour' to buy that bus ticket?

Bus departs three times a week from both cities. I wonder, who are passengers. Can't be only Chinese, Uyghurs and Paki's.

I was planning to stay in Beijing 2-3 days, but Paki ambassador told me, even if I have all 'proper' docs., it will take him at least a week to issue Tourist visa.

It might be the same requirement imposed on Chinese for traveling abroad.

Also 'need to have shepherd/leader' is most likely the cause.

3 reasons, financial, cultural and ignorance.

Financial reason: Tour agencies can get cheaper deals for almost everything since they book for many people at once. This bargain often means that the customers themselves will save 1 or 2 yuans per day on hotel and transportation (at the expense of freedom and forced shopping sessions), in the Chinese mind this is "smart".

Cultural reason: The Chinese feel terribly insecure when not belonging to a group, when alone, they have this urge of being socially accepted, Westerners are more independent and although we still enjoy being socially accepted, it is not a mandatory requirement of our culture.

Ignorance reason: Chinese still know very little about the outside world, in fact most know very little of outside their city even about other Chinese cities/provinces, because of restricted access to the internet and information, propaganda and centric views "China is the best, Chinese culture and language are the best, why would I bother learning about other countries, cultures or languages?", they willingly blindfold themselves from any external influence and have been doing so for most of their history except maybe during Tang dynasty where China was very open and ironically enough enjoyed a golden age in prosperity and science.

C H E A P

As long as I see on the news, the tour guides (and the scams) inside China happen in Hong Kong. Only people with a Hukou from 13 cities are allowed to visit Hong Kong without a tour group, so they all need to depend on the guides. And yes, I mean the Hukou, it's not enough with proving that you live on any of those cities (my wife, for example, was studying at a university in Shanghai but was still not allowed to go by  herself, not even with me). And no, they can't just get to the place and ignore the guide or they can be reported (most likely they will, since the tour company won't allowed them to free roam and lose the chance to milk their money).