Holidays at home for record number of Chinese as economic slowdown bites

September 28, 2023 - 9:38 AM
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(Photo by Zachary Keimig on Unsplash)

SHANGHAI A record number of Chinese are choosing to travel at home this Golden Week holiday, potentially boosting domestic consumption but disappointing travel agents who have been waiting for big-spending tourists to go back abroad since the pandemic ended.

China celebrates the Mid-Autumn Festival and National Day from Friday to Oct. 6 in the longest public holiday this year.

The break traditionally sees an overseas exodus of middle-class Chinese as well as bumper domestic travel, with millions of people, mostly laborers and factory workers, returning to their home villages.

But as the economy struggles to recover after the pandemic, previous holidays this year have disappointed in terms of spending per person, as a weak job market and low incomes hurt consumer spending.

More Chinese are still reluctant to spend on nice-to-haves such as overseas holidays, but how much they do spend domestically during this holiday will be a key gauge of consumer appetite, a crucial component for the long-term growth potential of the world’s second-largest economy.

“It’s not wise to spend so much money,” said Beijing tech industry employee Joe Zhang, who will travel within China this holiday after high ticket prices scuppered his plans to go to Japan. “I’m disappointed. I haven’t been abroad in three years,” the 27-year-old added.

The China Tourism Academy, part of the Ministry of Culture and Tourism, estimates people will make more than 100 million trips a day during “the most popular Golden Week in history”.

Trains are expected to be packed and the average number of daily flights is also a fifth higher than the 2019 holiday, according to flight app Umetrip.

The Spring Festival break earlier this year was the first big holiday since the end of nationwide COVID-19 curbs, but travel was muted due to an outbreak of the virus.

Fly less, buy less

While the data points towards a resurgence in domestic tourism, the outbound market has only recovered to about 60% of its pre-pandemic levels, said Boon Sian Chai, managing director and vice president of international markets for Trip.com, China’s largest online travel platform.

Cost is a major deciding factor, as the average price of international flights from China is up to 30% higher than before the pandemic, partly because airlines have yet to resume their pre-COVID schedules, Boon added.

A resident of Anqing city, in eastern Anhui province, who gave her family name as Cao plans to stay in her hometown this holiday, as the monthly installments for her recently purchased apartment were draining most of her disposable income. “I used to travel farther, but this year I will either stay in my hometown or go to nearby places,” she added.

China last month lifted restrictions on group tours for key travel markets such as Japan, South Korea and the United States but Nancy Dai, China Market Analyst at ForwardKeys, forecast international trips to be 48% lower than pre-COVID levels in the fourth quarter, citing visa issues and other factors.

Booking platforms and agencies say Chinese going abroad favor cheaper Asian destinations, with Thailand by far the preferred choice after it introduced a visa waiver program.

“If a family travels together, they can save more than 1,000 yuan,” on total visa fees, said Zhou Weihong, deputy general manager at travel agency Spring Tour. “That’s not bad!”

In 2019, mainland Chinese tourists spent $255 billion abroad, more than any other nationality, with group tours estimated to account for roughly 60% of that total.

But retailers longing for the return of these tourists will have to wait a while longer.

“I don’t think I will spend too much on shopping in Thailand,” said Wang Zheng, 31, another tech industry employee. “The main thing is to enjoy the beach.”

– Additional reporting by Wang Tao in Singapore; Editing by Marius Zaharia and Miral Fahmy