Spending on the May 1st holiday in China shows a mixed picture post-pandemic

Beijing (Reuters) – Domestic travelers spent 166.9 billion yuan ($23.13 billion) during one of China’s longest breaks, the May 1 holiday, up 13.5% from previous levels pre-pandemic, government data showed this Monday (6), but per capita spending was below 2019 rates.

Rising consumer confidence has posed a key challenge for Chinese authorities this year, amid a declining housing market, high youth unemployment and deflation pressures.

Total spending during the May 1-5 holiday was 12.7% higher than last year, just after China lifted Covid-19-related restrictions, and the Ministry of Tourism recorded 295 million domestic trips during the holiday.

But spending of 565.7 yuan per resident during the holiday — a key opportunity for residents to travel with family as the weather warms and spring flowers bloom — fell 11.5% from pre-Covid levels in 2019, according to calculations by Reuters based on official data.

The data dampens hopes of a consumption recovery after spending strengthened during another recent holiday, the Qingming Festival, but was not a surprise, said Jonathan Yan, partner at Shanghai-based consultancy Roland Berger.

“Overall, I think people are tightening their belts and confidence is low, but they still want to have experiences,” Yan said, adding that many travelers have opted for short-haul overseas destinations such as Japan and Korea for the five-day holiday. “They are not spending more money than before, but they are still traveling while doing some shopping or spending less on purchases,” she said.

Domestic air ticket prices fell in the run-up to the holiday as forecasts suggested more travelers were opting to travel by car or booked in advance to save money.

The number of short trips grew noticeably during the holiday, Guotai Junan Securities said in a research note on Monday.

Travel growth in small cities and counties has outpaced that in large cities, travel giant Trip.com added.

Cinema box office sales of 1.53 billion yuan roughly matched last year’s figure of 1.52 billion yuan in the corresponding period, the China Film Administration said.