China’s domestic travel during the eight-day Golden Week holiday surged from a year earlier and exceeded pre-pandemic levels, according to official data, but growth showed signs of slowing and came below government expectations.
Strong Travel Numbers
Travelers in China made 826 million domestic trips over the Mid-Autumn and National Day holiday that ended Friday, up 71.3% from a year ago and 4.1% higher than pre-pandemic 2019 levels, data from the Ministry of Cultural and Tourism showed.
Slower Growth Compared to Previous Holidays
However, the growth in travel during the Golden Week holiday was slower compared with the Labor Day holiday in May and the Dragon Boat Festival in June, which suggested that the service sector’s recovery has slowed, Goldman Sachs said in a note to clients Monday.
The number of travelers during the Labor Day holiday and the Dragon Boat Festival was 19.1% and 12.8% higher than 2019 levels, the investment bank noted.
Service Sector Impact
The service sector suffered the most from Beijing’s draconian Covid restrictions, which were lifted late last year.
Below Government Expectations
The latest data also came in below the government’s projections made before the holiday, which expected higher traveler numbers and tourism revenue. The cultural and tourism ministry had expected 896 million trips to be made, generating 782.5 billion yuan ($108.75 billion) of revenue.
During the eight-day holiday, China’s domestic tourism market recorded CNY753.4 billion in revenue, more than double from a year earlier and up 1.5% from the 2019 level, according to the official data.
China’s Travel Industry Shows Positive Recovery During Holiday
During the recent holiday, China’s inbound and outbound trips experienced a significant increase year on year, although the numbers were slightly below the government’s previous forecast. Official data reveals that the average daily number of passenger trips during the eight-day holiday reached 1.477 million, which corresponds to 85.1% of the 2019 level. While this is an impressive recovery compared to 2022 figures, it falls short of the government’s initial projection of 1.58 million daily trips.
Additionally, retail and catering companies in the country witnessed a 9% year-on-year growth in sales during the first week of the Golden Week holiday, according to the Ministry of Commerce. Meanwhile, China’s movie box office revenue reached CNY2.7 billion, with daily averages surpassing those of 2022. However, it is important to note that these figures remain lower compared to the levels achieved in 2021 and 2019.
Despite continued efforts and support measures from the government, China’s property sector still faces challenges. New-home transactions in 35 cities monitored by the China Index Academy experienced a decline of approximately 20% compared to both the previous year and 2019 levels, as reported by the state-run Securities Times.
Overall, while China’s service industry continues its recovery journey, improvements in certain sectors are more noticeable than others. It remains crucial to monitor these trends as they have a significant impact on the country’s economic landscape.