China’s Lunar New Year Tourism Revenues Surge 47.3% and Surpass 2019 Levels
China experienced a significant surge in tourism revenues during the Lunar New Year holidays, surpassing 2019 levels and offering temporary relief to policymakers. The boost in domestic travel came as a result of an extended holiday period and a strong demand for tourism within the country. However, analysts are cautious about the sustainability of this tourism boom and highlight that the revenue per trip remains below pre-pandemic levels.
The Lunar New Year holiday, also known as the world’s largest annual migration, saw massive crowds flocking to tourist attractions across China. According to data from the Ministry of Culture and Tourism, domestic tourism spending during the holiday increased by 47.3% compared to the same period in 2023, reaching 632.7 billion yuan ($87.96 billion). The number of domestic trips made during this year’s holiday also grew by 34.3%, totaling 474 million.
Compared to the Lunar New Year holiday in 2019 before the COVID-19 pandemic, domestic tourism spending rose by 7.7% and domestic trips increased by 19%. However, it is important to note that this year’s holiday lasted for eight days, one day longer than in 2019. Despite the overall growth in tourism revenues, the average spending per trip during the holiday decreased by 9.5% from 2019, reaching 1,335 yuan.
Analysts at Goldman Sachs pointed out that while domestic tourism data during the Lunar New Year holiday improved compared to earlier holidays, such as New Year’s and the National Day Golden Week, the revenue per head softened and remained below pre-pandemic levels. This suggests a trend of “consumption downgrading,” indicating that consumers are spending less on each trip.
The Lunar New Year holiday, also known as the Spring Festival, is a time when millions of people traditionally return to their hometowns to reunite with family members. This year, China also witnessed a growth in international travel, with around 13.52 million inbound and outbound trips during the holiday, a 2.8-fold increase compared to the same period last year. The total entry-exit trips during the holiday reached 90% of the levels seen in 2019, according to the National Immigration Administration.
In addition to tourism, film watching became one of the most popular entertainment activities during the holiday. The China Film Administration reported that the country’s box office revenue exceeded 8 billion yuan ($1.11 billion) over the eight-day holiday, setting a new record high.
The surge in tourism revenues comes at a time when China’s economy is facing multiple challenges, including a property downturn and sluggish demand. Policymakers have been implementing measures to stimulate growth, such as cutting interest rates. However, the country is also cautious about deflationary pressures and the need for a delicate balancing act to support the economy.
Overall, China’s Lunar New Year holiday saw a significant boost in tourism revenues, surpassing pre-pandemic levels and offering temporary relief to policymakers. However, concerns remain about the sustainability of this growth and the lower revenue per trip. As China continues to navigate economic challenges, it remains to be seen how the tourism industry will fare in the coming months.