Sat, October 16, 2021

business

Chinese Golden Week travel suggests sluggish holiday spending


Travel during Chinas "Golden Week" national vacation was down by a third on pre-pandemic levels, suggesting government measures to contain sporadic coronavirus outbreaks are weighing on tourism and spending in the worlds second-largest economy.

The number of trips taken on China's road, rail and other transport networks on Tuesday was 33.8% below levels seen in 2019, with travel consistently a third below pre-pandemic levels for each of the first five days of the holiday, according to the transport ministry. Compared with 2020, daily trips were more than 5% lower.

To achieve its Covid Zero goals, China has used strict measures of quarantine and business closures to stamp out imported clusters of the delta-variant of the coronavirus that emerged from late July. Officials advised against unnecessary travel and gatherings over the Golden Week holiday, which began Oct. 1, citing the risk of further outbreaks.

The seven-day break is China's most important annual holiday after the Lunar New Year and traditionally a time for tourism trips.

The virus restrictions are hurting consumer spending at a time when electricity shortages caused by high coal prices led to factory shutdowns and tough government policies to control the housing market weigh on property investment. Multiple economists have recently downgraded their forecasts for economic growth for this year.

"Recent Covid outbreaks are also still weighing on domestic spending and this pressure is likely to linger for longer," Louis Kuijs, head of Asia economics at Oxford Economics, wrote in a note. He downgraded his estimate for China's growth in the fourth quarter to 3.6% year-on-year from 5% previously, citing the continued impact of property curbs as the main factor.

Citigroup analysts said while leisure travel is showing signs of recovery, the rebound in tourism revenue may lag because of shorter trips, younger tourists and discounted products.

Cinema box office sales climbed during the holidays, a sign that consumers may be spending more on leisure activities closer to their places of residence even as they travel less.

Ticket sales over the first five days of the vacation were 3 billion yuan ($465 million), compared with 2.7 billion yuan in 2020, according to ticketing company Maoyan. Sales were driven by the success of "Battle at Lake Changjin" a patriotic film about the Korean War. Those sales were still below 2019 levels, when moviegoers spent 3.25 billion yuan over the first five days of the holiday.

China is expected to release more detailed spending data over the period at the end of the vacation on Thursday.

Published : October 07, 2021

By : THE NATION