Weak Holiday Results in China
National Day (October 1) was the beginning of Golden Week in China, a week-long holiday known for high travel volumes and commerce saw reduced travel this year due to COVID restrictions, leading to a drop of 18.2% y/y in the number of tourists traveling, and a 39.3% drop y/y relative to pre-pandemic levels (2019). Consequently domestic tourism revenue also dropped by 26.2% y/y and by 55.8% vs 2019 levels, with ~75% of A-Level tourist attractions open this year. Chinese cultural centers sponsored 13,940 activities with 59.27m Chinese citizens participating, with the government sponsoring 9,100 “Cultural & Tourism Consumption Promotional Activities in 85 cities, funded by $39.6m in subsidies.
We expect much of the weak showing was a result of the specific restrictions on travel in a number of cities and regions due to the country’s stringent COVID rules, and a general malaise over the weakness in housing prices and the general economy in the country. While one might expect that restrictions might be eased a bit as the Chinese Communist Party Congress meets later this week, but it seems that local officials see the restrictions as a sign of loyalty to the party and will do almost anything to prevent an outbreak in the near-term, regardless of the economic consequences. The above travel numbers were the lowest since 2014.
We expect much of the weak showing was a result of the specific restrictions on travel in a number of cities and regions due to the country’s stringent COVID rules, and a general malaise over the weakness in housing prices and the general economy in the country. While one might expect that restrictions might be eased a bit as the Chinese Communist Party Congress meets later this week, but it seems that local officials see the restrictions as a sign of loyalty to the party and will do almost anything to prevent an outbreak in the near-term, regardless of the economic consequences. The above travel numbers were the lowest since 2014.
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