Chinese travel surged over the Labor Day holidays to exceed pre-pandemic levels while spending continued to lag, signaling a slow recovery in consumption.
There were 230 million domestic trips over the five-day break, a 3.2% increase from 2019, according to government data. Consumers are still reluctant to spend though, with tourism revenue rising to 113 billion yuan ($17.4 billion), or 77% of the level reached two years ago.
While revenue picked up from the previous public holidays in April, the figures show consumers aren’t splurging as they have before, given a still uncertain economic outlook and weak labor market. The Communist Party’s Politburo, the top decision making body, said last week the economic recovery is still uneven and pledged raise people’s income to help spur domestic demand.
Stocks of tourism and movie businesses dropped Thursday as investors rushed to take profit after the holiday break.
Citigroup Inc. economists said consumption, especially on services, is emerging as a new growth driver, but it may not yet be the time for many to spend on expensive leisure activities. They also cited relatively soft prices of travel products and a possible shift toward short-distance tourism as a reason for subdued revenue.
Other entertainment activities also performed well during the break. Box office revenue registered about 1.6 billion yuan during the break, state-run Xinhua News Agency reported citing Maoyan Entertainment. Meanwhile, the pandemic has encouraged quality trips, with small-group private tours surging 290% from 2019 and high-end hotels taking up 40% of total hotel bookings, Xinhua reported citing Ctrip International Ltd.
— With assistance by Yinan Zhao, and Yujing Liu