Yes, you are correct. Exp B will basically have two experiences in it. One for each audience. Within visual experience composer, you can select the audience and then create an experience specifically for them. Go into Audiences first and set up your two audiences based on GEO. Then add those to the test.
I don't think I would use auto-allocate. That just starts to show the new visitors the better performing exp. I would just leave it at manual 50/50. What that will do is make it so that 50% of your tourist audience sees the control and 50% sees Exp B for tourists. And also 50% of the local audience will see control and 50% will see Exp B for local.