China sees Labour Day tourism surge, but no such spike for average spending (2024)

China sees Labour Day tourism surge, paving way for sector’s full-spectrum recovery

China’s tourism sector posted robust growth over the Labour Day holiday – making a strong contribution to the country’s efforts to keep up economic momentum – though a similar spike was not observed for average spending, a phenomenon analysts attributed to changes of consumption patterns among the middle class.

Over the five-day period – a break that ended on Sunday and is also known as May Day – China recorded 295 million domestic trips nationwide, up 7.6 per cent year on year from 2023 and 28.2 per cent higher than pre-Covid levels in 2019, the Ministry of Culture and Tourism said on Monday.

Tourism revenue totalled 166.89 billion yuan (US$23.1 billion), up 12.7 per cent from the previous year and 13.5 per cent from 2019. The ministry made its calculations by accounting for the holiday’s shorter length in pre-pandemic years.

“It was unsurprising to see strong numbers again in the May Day holidays after earlier data from the Lunar New Year holiday also showed tourism numbers beating pre-pandemic levels,” said Lynn Song, chief economist for Greater China at ING.

Bridge in China swamped with tourists during Lunar New Year holiday

However, tourists spent an average of 565 yuan (US$78) this year – up 4 per cent year-on-year, but below the 603 yuan average reported for 2019.

Tourism has stood out as a growth performer even as overall domestic demand remains weak, with some local governments reporting record figures. Experts said that rising travel demand will sustain the sector’s steady recovery for the rest of the year.

Song said the era of Covid-19 prompted consumers worldwide to reassess their spending priorities, with shared experiences such as dining out, attending live events and travelling gaining precedence over luxury or hi-tech items.

Property market developments have rebalanced consumption [in China] as well,” she said. “Some prospective buyers may feel less pressure to save as much for future property purchases, and lower home sales also translate to less spending on appliances.”

The capital city of Beijing reported an influx of 16.966 million tourists during the holiday, generating record tourism revenue of 19.62 billion yuan.

Anhui province in eastern China, a hub for electric vehicle manufacturing, reported a 36.2 per cent surge in tourists during the holiday compared to 2019. Tourism revenue also soared in relation to that year, rising 55 per cent to a record high of 27.28 billion yuan.

While traditional destinations continue to flourish, smaller towns and cities are attracting more visitors.

Travel bookings in smaller counties and cities surged 140 per cent year-on-year, with ticket purchases for local attractions up 151 per cent year-on-year and surpassing the national average, Chinese travel agency Ctrip said on Sunday.

Local governments are seizing this opportunity to develop more tourism products and generate revenue

“On one hand, residents’ income expectations remain low, and they are trying to travel to newer and affordable cities to save on costs,” according to Lin Huanjie, dean of the Institute for Theme Park Studies in China.

“On the other hand, some small and obscure counties can satisfy the curiosity of tourists,” Lin said. “Local governments are seizing this opportunity to develop more tourism products and generate revenue. Increased travel is also a way for Chinese citizens to heal the scars from the pandemic.”

Along with tourism, other consumer sectors in China are picking up.

Major retail and catering companies witnessed a 6.8 per cent year-on-year increase in sales over the past five days, while online retail sales rose by 15.8 per cent, China’s Ministry of Commerce said on Monday.

China’s box office revenue during the holiday reached 1.53 billion yuan, similar to last year and 2019 but down 9 per cent from 2021, according to a Monday report from the China Film Administration.

In addition, China received around 779,000 foreign tourists in the past five days per the National Immigration Administration, up 98.7 per cent from the same period last year.

China sees Labour Day tourism surge, but no such spike for average spending (2)


Chinese tourists stranded on mountain during Golden Week holiday

Chinese tourists stranded on mountain during Golden Week holiday

“Such high growth came due to the minimal presence of foreign tourists in China during the same period last year, as Beijing had just started opening up entry visa processing in mid-March,” said Steven Zhao, CEO of the Guilin-based online travel agency China Highlights.

China’s visa waiver policy, expanded international flight calendar and heavy promotion on social media platforms are also contributing to the influx, Zhao said.

Recovery has also been observed in the other direction. According to Chinese travel agency Touniu on Sunday, outbound tourists on the platform accounted for 27 per cent of total tourists, up 190 per cent year-on-year.

Japan, South Korea and countries in Southeast Asia – as well as Macau and Hong Kong – were the top preferences for travellers leaving mainland China, the agency said.

“In the coming half of the year, China’s inbound tourism is expected to rebound to 70 to 80 per cent of its 2019 levels. However, it may take another two to three years for outbound tourism to fully recover,” Zhao added.

Song from ING said China will sustain strong growth in domestic and inbound tourism in 2024.

“As more investment is made into the tourism industry, this could be a multi-year driver of growth,” he said. “China has rich cultural and ecological tourism hotspots, providing a great foundation to build upon.”

China sees Labour Day tourism surge, but no such spike for average spending (3)

China sees Labour Day tourism surge, but no such spike for average spending (2024)
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