Chinese Opt for Domestic Holidays as Economic Slowdown Bites

A significant surge in domestic travel is witnessed this year during China’s extended Golden Week holiday, marking a departure from the usual trend of overseas vacations. While this shift promises to boost domestic consumption, it disappoints travel agents eagerly awaiting the return of big-spending tourists post-pandemic.

Longest Public Holiday of the Year

China’s Mid-Autumn Festival and National Day celebrations, spanning from Friday to October 6, make up the longest public holiday in 2023. Traditionally, this period witnesses both an exodus of middle-class Chinese abroad and robust domestic travel, with millions of laborers and factory workers returning to their hometowns.

Economic Challenges Impact Spending

However, the post-pandemic economic struggles have cast a shadow over this year’s holidays, with previous vacations this year experiencing lower per-person spending. A weak job market and reduced incomes have hindered consumer spending on non-essential items, such as overseas vacations.

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Domestic Spending Crucial

The extent of domestic spending during this holiday holds significant implications for China’s long-term economic growth. Many Chinese individuals remain hesitant to splurge on overseas trips due to economic uncertainties.

Beijing tech employee Joe Zhang lamented, “It’s not wise to spend so much money,” opting for domestic travel within China due to high ticket prices thwarting his Japan plans. “I’m disappointed. I haven’t been abroad in three years,” added the 27-year-old.

Tourism Boom Expected

The China Tourism Academy predicts that this Golden Week will see over 100 million trips per day, making it “the most popular Golden Week in history.” Trains are expected to be packed, and daily flights are projected to be one-fifth higher than in 2019, according to the Umetrip app.

Outbound Travel Remains Subdued

While domestic tourism shows signs of resurgence, the outbound market has only recovered to about 60% of its pre-pandemic levels. Cost is a crucial factor, with group travel tour prices up to 30% higher than before the pandemic. Airlines’ limited pre-COVID schedules contribute to this increase.

Economic Constraints Affecting Choices

For Anqing city resident Cao, high monthly installments for her recently purchased apartment limit her disposable income. She plans to stay in her hometown or explore nearby areas this holiday, reflecting the impact of economic constraints on travel choices.

International Travel Challenges

China recently lifted restrictions on group tours to key markets like Japan, South Korea, and the United States. However, international trips are predicted to remain 48% lower than pre-COVID levels in the fourth quarter, primarily due to visa issues and other factors, according to Nancy Dai, China Market Analyst at ForwardKeys.

Preference for Affordable Destinations

Chinese travelers favor cheaper Asian destinations when heading abroad, with Thailand being the top choice following the introduction of a visa waiver program. Travel agency Spring Tour’s deputy general manager, Zhou Weihong, noted that families traveling together can save over 1,000 yuan on total visa fees.

Retailers Await Tourists’ Return

In 2019, mainland Chinese tourists spent $255 billion abroad, with group tours accounting for roughly 60% of that total. Retailers eagerly anticipate the return of these tourists, although it may take some time.

Tech industry employee Wang Zheng summed up his travel plans succinctly, saying, “I don’t think I will spend too much on shopping in Thailand. The main thing is to enjoy the beach.”

($1 = 7.3030 Chinese yuan renminbi)

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Disclaimer: Please note that this article serves solely for informational purposes and should not be construed as financial advice. We strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.