context: With COVID restrictions rolled back in December, the holiday spending data was likely to paint a rosy picture as savings had swelled through repeated lockdowns for certain groups. However, the hit to incomes over the last three years may prevent the rebound from reaching previous heights.
Travel and holiday spending data rebounded strongly over the Spring Festival holiday as the end of COVID controls prompted increased movement. Data from official and private sector sources showed
- over the holiday, 308 million domestic tourist trips were made, a y-o-y increase of 23.1 percent and 88.6 per cent of 2019's level, according to the Ministry of Culture and Tourism
- tourism revenues will be C¥375.84 bn, up 30 percent y-o-y and 73.1 percent of 2019
- Ctrip and other online booking platforms reached record highs, seeing as much as a 300 percent increase over last year and exceeding 2019's level
- value-added tax invoice data showed sales revenue of consumption-related industries across the country increased by 12.2 percent y-o-y with an average annual increase of 12.4 percent over 2019
- local tourism which had grown over the last three years took a back seat to cross-provincial travel with nearly 70 percent of hotel bookings made across provinces
A sustained recovery in consumer spending will depend on the recovery of employment and income, notes Liang Zhonghua 梁中华 Haitong Securities chief macro analyst. There are also likely to be structural differences in the recovery as certain income groups' savings swelled and they will now look to spend. However, the groups that were forced to spend their savings during the tougher economic times will have to pull back on spending.