This study investigates the competitiveness of overseas destinations as perceived by leisure tourists from mainland China, with a focus on how the competitiveness of destinations varies by choice set. The results of this study confirm the funnel‐down structure of consumer choice sets including the early choice set, the middle choice set, and the late choice set: The size of these sets became progressively smaller as the moment for making the final decision drew nearer. In addition, the results clearly indicate that travel distance is an important determinant of tourism demand: Short‐haul destinations are more competitive than long‐haul destinations.