BEIJING – People in China are moving beyond the pandemic and embarking on a journey, Lunar New Year holiday program preliminary data.
“The pent-up demand is being unleashed as many individuals rush to scenic spots, watch fireworks displays and crowd into restaurants and hotels,” Nomura’s chief China economist Ting Lu said in a Thursday report.
He said China’s Covid “exit wave” is ending quickly as official figures show a decline in infections, hospitalizations and deaths. “China is rapidly achieving herd immunity for Covid as the federal government estimates that around 80% of the population has already been infected with Covid.”
The country saw a spike in Covid infections in December, just as Beijing ended nearly three years of rigorous contact tracing and border controls. The seven-day Lunar New Year, which officially began on Saturday, is the primary major holiday since China’s Covid restrictions ended.
Nationally, bookings for bed and breakfast stays have greater than doubled in comparison with last yr, and ticket sales to attractions have greater than fivefold, in response to data Trip.com data for the primary 4 days of the Lunar New Year.
The travel booking site claimed that for those 4 days, bookings for hotels and other tourist attractions exceeded levels seen in the course of the same period in 2019, before the pandemic.
People from mainland China were also wanting to go abroad.
Bookings for flights from the continent to overseas destinations in the primary 4 days of holidays have quadrupled in comparison with last yr, while related hotel bookings have doubled, Trip.com reported.
Travel vs. Big Ticket Expenses
It is less clear whether the surge in tourism means China’s consumption is on course to get better from the three-year crisis. Retail sales fell by 0.2% in 2022.
Domestic each day trips to this point over the Lunar New Year holiday period – from January 8 – have increased by around 50% in comparison with last yr, in response to the Ministry of Transportation.
However, the ministry said that as much as tens of hundreds of thousands of trips every day are still falling sharply from 2019 levels.
“Mall foot traffic, latest home purchases and automobile sales data suggest big ticket consumption may remain limited,” said Nomura’s Lu.
“Growth in passenger automobile retail sales volume clearly slowed right down to -21.0% y/y in January 1-15 from 3.0% in December, following the completion of a seven-month 50% reduction in purchase tax,” he said within the report.
The propensity of Chinese households to save lots of reached an all-time high last yr amid uncertainty about future income and a slump within the housing market. Most household wealth in China is real estate.
According to a survey by Oliver Wyman in December, amongst those in China who plan to spend more in brick-and-mortar stores, supermarkets ranked highest, followed by convenience stores. Shopping malls ranked lower.
However, moods can change quickly.
The survey found that in only one week at the top of December, respondents became far more comfortable with leaving the home.
“We think that is a really positive sign of resilience and the way quickly consumer confidence will improve,” Oliver Wyman’s partner Imke Wouters said in a telephone interview earlier this month. “Retail is directly related to consumer confidence.”