China shrugging off Covid as tourist bookings soar for Lunar New Year
BEIJING — People in China are overcoming the pandemic and going on a journey, according to preliminary data for the Lunar New Year holiday show.
“Unmet demand is being released as many people flock to scenic spots, watch fireworks and crowd into restaurants and hotels,” Ting Lu, chief China economist at Nomura, said in a report Thursday.
The “exit wave” from China is quickly ending, he said, as official data shows a decline in infections, hospitalizations and deaths. “China is rapidly achieving its herd immunity to Covid as the government estimates that around 80% of the population is already infected with Covid.”
The country saw a spike in Covid infections in December, just as Beijing ended nearly three years of strict contact tracing and border controls. The seven-day Lunar New Year, officially starting on Saturday, is the first major holiday since the lifting of Covid restrictions in China.
Domestically, bed and breakfast bookings have more than doubled from a year ago, and ticket sales for attractions have more than quintupled, according to the agency. trip.com data for the first four days of the Lunar New Year.
The travel booking site said that in those four days, bookings for hotels and other travel activities exceeded levels seen in the same period in 2019, before the pandemic.
Mainland Chinese also sought to travel abroad.
Flight bookings for trips from the mainland to foreign countries during the first four days of a holiday quadrupled year-over-year, according to Trip.com, with qualifying hotel bookings doubling.
Travel vs. Big Expenses
What is less clear is whether the surge in tourism means that consumption in China is on track to recover from a three-year slump. Retail sales fell 0.2% in 2022.
According to the Department of Transportation, daily domestic travel during the Lunar New Year holiday period – from January 8 – has increased by about 50% compared to last year.
But even tens of millions of trips each day are still sharply below 2019 levels, the ministry said.
“Shopping mall attendance, new home purchases and car sales data suggest that large ticket consumption may remain subdued,” Nomura’s Lu said.
“In-kind light vehicle retail sales growth declined markedly to -21.0% year-on-year between Jan. 1 and Jan. 15 from 3.0% in December, after the seven-month 50 percent purchase tax cut ended,” it said. report.
Chinese households’ propensity to save reached an all-time high last year amid uncertainty about future incomes and a downturn in the property market. The bulk of household wealth in China comes from real estate.
Among Chinese residents planning to spend more in physical stores this year, supermarkets rank first, followed by convenience stores, according to an Oliver Wyman survey in December. Shopping malls ranked lower.
However, the mood can change quickly.
The study found that in just a week at the end of December, respondents became significantly more comfortable going out.
“We think this is a very positive sign of sustainability and how quickly consumer confidence will improve,” Imke Wouters, partner at Oliver Wyman, said in a telephone interview earlier this month. “Retail sales are directly related to consumer confidence.”
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