China's Golden Week holiday travel drops as consumers spend at home

The Hutong neighbourhood in Beijing during a recent holiday. PHOTO: EPA-EFE

BEIJING (BLOOMBERG) - Travel during China's Golden Week national holidays was down by a third compared with pre-pandemic levels, with government measures to contain sporadic Covid-19 outbreaks prompting holidaymakers to spend closer to home.

The number of trips taken on China's roads on Wednesday (Oct 6) was 34.1 per cent below levels seen in 2019, according to the Transport Ministry, and 2.2 per cent lower than in last year.

Trips taken on roads, rail and other transport networks have been consistently a third below pre-pandemic levels for each of the first five days of the week-long break.

To achieve its Covid-19-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 holidays, which began on Oct 1, citing the risk of further outbreaks.

The seven-day break is China's most important annual holiday after Chinese 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 have 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-19 outbreaks are also still weighing on domestic spending and this pressure is likely to linger for longer," Mr 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 per cent year on year from 5 per cent previously, citing the continued impact of property curbs as the main factor.

There are signs that consumers may be spending more on leisure activities closer to their places of residence even as they travel less.

Cinema ticket sales over the first five days of the holiday period were three billion yuan (S$632 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 period.

A Golden Week consumer trend report issued by food delivery giant Meituan on Wednesday showed that for almost 80 per cent of people, consumption took place at their local place of residence during the holiday period.

Total spending on the platform on everything from food to travel rose almost 30 per cent compared with last year's holidays, and grew by more than 50 per cent compared with 2019, local media reported.

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

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