BEIJING — People in China are moving past the pandemic and going out to travel, preliminary data for the Lunar Recent Yr holiday show.
“Pent-up demand is being released as many individuals rush to scenic spots, watch firework shows and crowd into restaurants and hotels,” Nomura’s chief China economist Ting Lu said in a report Thursday.
China’s Covid “exit wave” is quickly ending as official data show a drop in infections, hospitalizations and deaths, he said. “China has been rapidly reaching its Covid herd immunity, as the federal government estimates about 80% of the population has already been infected with Covid.”
The country saw a surge in Covid infections in December, just as Beijing ended nearly three years of stringent contact tracing and border controls. The seven-day Lunar Recent Yr, which officially began Saturday, is the primary major holiday for the reason that end of China’s Covid restrictions.
Inside the country, reservations for stays at bed and breakfasts greater than doubled from a yr ago, while ticket sales for attractions grew by greater than fivefold, in line with Trip.com data for the primary 4 days of the Lunar Recent Yr.
The travel booking site claimed that for those 4 days, reservations for hotels and other tourist activities exceeded levels seen for a similar period in 2019, before the pandemic.
People in mainland China were also desperate to travel abroad.
Flight bookings for travel from the mainland to overseas destinations throughout the first 4 days of the vacation quadrupled from a yr ago, while related hotel reservations doubled, Trip.com said.
Travel vs. big-ticket spending
It’s less clear whether the surge in tourism implies consumption in China is well on its method to recovering from the slump of the last three years. Retail sales fell by 0.2% in 2022.
Domestic day by day trips for the Lunar Recent Yr holiday travel period thus far — since Jan. 8 — are up by about 50% from a yr ago, in line with the Ministry of Transport.
But even the tens of hundreds of thousands of trips every day remains to be down sharply from 2019 levels, the ministry said.
“Shopping center foot traffic, recent home purchases and auto sales data suggest big-ticket consumption may remain subdued,” Nomura’s Lu said.
“Growth in passenger automobile retail sales in volume terms dropped noticeably to -21.0% y-o-y during 1-15 January from 3.0% in December, following the ending of the seven-month 50% purchase tax cut,” he said within the report.
Chinese households’ penchant to avoid wasting reached record highs last yr amid uncertainties about future income and a slump within the property market. The majority of household wealth in China is in real estate.
For people in China planning to spend more at physical stores this yr, supermarkets ranked the best, followed by convenience stores, in line with an Oliver Wyman survey in December. Shopping malls ranked lower.
Nevertheless, sentiment can shift quickly.
The study found that inside just every week in late December, survey respondents became significantly more comfortable with venturing out.
“We expect that is a really positive sign of resilience and the way quickly consumer confidence will improve,” Oliver Wyman partner Imke Wouters said in a phone interview earlier this month. “Retail sales are directly linked to consumer confidence.”