Record Highs in Travel, Consumption Boost Mark 2024 Chinese Spring Festival Holidays

Travel and consumption trends registered remarkable growth during the 2024 Chinese New Year holidays, giving hope for the positive trend to continue also in the year ahead. However, lingering challenges, such as low level of consumer confidence and the ongoing downturn in the property sector, cast uncertainties on the sustainability of these figures.

The tourist industry registered significant growth during this year’s Chinese New Year (CNY) holidays, the first to be completely unaffected by the COVID-19 pandemic.

According to the latest figure released by the Ministry of Culture and Tourism, both travel numbers and tourism-related revenues reached unprecedented levels, surpassing figures registered during the 2023 Chinese New Year while also surpassing pre-COVID-19 levels.

These positive outcomes might offer temporary relief to China, amidst deflationary risks stemming from weakened consumer demand. However, the sustainability of this tourism boom remains uncertain.

Rebound in domestic and international travels

According to the data released by the Ministry of Culture and Tourism on Sunday, domestic tourism registered a remarkable performance during this year’s eight-day celebration.

The data reveals a significant surge in domestic trips, totaling 474 million trips made across the country from February 10 to February 18, marking a notable increase of 34.4 percent compared to the same period in 2023. This figure attracted special attention as it was a 19 percent rise compared with that in 2019.

The surge in travel within the country was facilitated by traditional transportation models, such as railways, civil aircraft, and waterways. Additionally, this year there has been also an increase in travelers embarking on independent road trips, partially due to the current rise in popularity of electric cars in China. This trend was further encouraged by the government’s efforts to stimulate the purchase of these vehicles as a way to boost domestic consumption. To cater to this trend, provinces ensured the temporary deployment of additional recharging stations in service areas, ensuring a seamless travel experience for travelers.

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The travel rush registered during the CNY break positively impacted domestic tourism revenues. The latter soared to RMB 632.7 billion (around US$87 billion), marking a remarkable 43.7 percent increase compared to the previous year and a notable 7.7 percent rise compared to 2019 levels.

Among popular travel trends, North-South crossing routes became especially popular this year among domestic travelers, with interprovincial travel orders doubling year-on-year. This trend indicates a continuation of the rebound already observed in 2023. Within this trend, “ice and snow” scenic destinations such as Harbin and Shenyang, and winter activities in these areas became especially popular among visitors coming from warmer southern provinces. Conversely, destinations like Sanya, Haikou, and Guangzhou appealed to the northern tourists looking to “escape the cold”.

The inbound and outbound tourism markets also showed a good performance during the holidays, suggesting a rapid recovery in this sector. Around 3.6 million overseas trips were made, while the Chinese mainland received about 3.23 million visits from overseas destinations.

Short-haul cross-border routes were preferred for outbound trips, with destinations like Thailand, Japan, Malaysia, Singapore, South Korea, Australia, Indonesia, and the United Arab Emirates being popular choices.At the same time, data from Ctrip shows that inbound travel ticket booking during the Spring Festival in 2024 increased by 819 percent, with travel orders during the CNY period increasing by more than tenfold year-on-year. Key overseas tourist source areas include Japan, the United States, South Korea, Malaysia, Vietnam, Thailand, and some European countries including Germany and the UK.

The momentum recorded in inbound and outbound travel can be attributed to the relaxation of visa requirements that has characterized China’s recent foreign policy approach. At present, the number of countries that enjoy mutual visa exemption with China has increased to over 150, making it easier and more appealing for a larger range of travelers to visit China and vice versa, contributing to the rebound of the tourism market.

The surge of new trends in service consumption

Meituan’s report “eating, drinking, and having fun” (“吃喝玩乐”) released on February 15 highlighted a strong start for the life service industry during the 2024 CNY holidays. Average daily sales revenue of service consumption-related industries increased significantly, up by 36 percent year-on-year and over 155 percent compared with the same period in 2019. Notably, provinces such as Guangdong, Jiangsu, Sichuan, Zhejiang, and Shandong ranked among the top in terms of consumption scale.

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This surge in consumption can be attributed not only to consumers’ willingness to spend during the festive season but also to the concerted efforts by local governments to stimulate consumption. The allocation of RMB 600 million (around US$83 million) in consumer discounts incentivized cultural and tourism experiences, including attending performances, visits to scenic areas, indulgence in local delicacies, and accommodation options such as hotels and homestays, thus fostering the emergence of new consumer trends.

As a matter of fact, according to Meituan’s report, the food industry emerged as an especially thriving sector during this year’s CNY holidays. Scenic restaurants registered a significant surge in orders for multi-person dine-in set meals in the five days leading up to the Spring Festival, which increased by 161 percent compared to the previous year. Similarly, the craze of visiting relatives also drove the rapid growth in consumption of catering in the country, reaching a notable 17 percent year-on-year increase in catering enterprise sales. The percentage of catering stores that operate online is also constantly increasing.

Finally, in the food sector, Meituan registered a growing popularity of imported foreign flavors such as cherries and king crabs on CNY’s Eve dinners. In terms of retail sales, the overlapping of CNY with Valentine’s Day boosted sales in the flower industry, with flower delivery volumes tripling compared to the year before.

Meanwhile, a wide array of cultural activities and events took place across the country, engaging millions of people in various forms of cultural expression and appreciation. This was in line with the surge in cultural exploration showcased by tourists who sought to immerse themselves in the spirit of CNY’s traditions.

This new interest fed into the night economy, with various regions launching immersive night tour projects such as the Year of the Dragon Light Exhibition and themed light and shadow shows. Meituan’s data revealed that nighttime consumption accounted for approximately 53 percent of total consumption during the holiday, as tickets for leisure activities doubled, and searches for “night tours” were particularly popular in cities like Beijing, Qingdao, Nanjing Hangzhou, and Shanghai.

Overall, museums across the country experienced a significant increase in visitors during the holiday, with a total of 73.5801 million people attending, representing a remarkable year-on-year increase of 98.6 percent, indicating the widespread interest in participating in cultural activities nationwide.

China box office sales

During the 2024 CNY holidays, film watching emerged as one of the most popular leisure activities. Data from box office trackers Maoyan and Beacon revealed that, as of 9:00 pm on the  February 17, the total box office sales soared to RMB 8.016 billion (approx. US$1.13 billion) in earnings with 163 million moviegoers nationwide. Domestic comedy movies accounted for over 97 percent of the total earnings.

Compared to the previous year, the national movie box office and the number of moviegoers registered an increase of 18.4 percent and 26.36 percent, respectively, setting a new record for the same period.

The highest-grossing film over this period has been Jia Ling’s YOLO, which ranked with an impressive revenue of RMB 2.72 billion (around US$378 million), representing more than one-third of the total earnings. This movie was followed by Pegasus 2, and Boonie Bears: Time Twist, which earned RMB 1.39 billion (around US$193 million) and RMB 1.34 billion (around US$186 million), respectively.

Can the auspicious beginning of the Year of the Dragon catalyze economic recovery in 2024?

CNY has always served as a crucial period for stimulating domestic demand and activating consumption potential. Spending increased across various segments – food, accommodation, travel, and entertainment.

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The overall consumption during the holidays surpassed figures registered both in 2023 and in 2019. The longer duration of the holiday, which this year lasted one day more, coupled with the complete end to COVID-19 restrictions, instilled a heightened willingness among people to engage in travels and consumption activities.

However, Goldman Sachs’ analysts temper the optimism with a more cynical perspective. By breaking down the spending data, there are differences between the overall consumption and the expenditure per capita when compared to the pre-pandemic period. While overall consumption surpassed 2019 numbers, the per capita spends were still 9.5 percent below the 2019 level. This suggests that while people may have traveled more during the holidays, the level of spending had not necessarily jumped.

In fact, the overall boost in consumption could also be attributed to pent-up demand, as many Chinese were making long journeys and visiting family members for the first time since the pandemic.

Moreover, when looking at the service consumption trends, a shift in attitude among Chinese travelers has also been observed. They are moving away from the “shop-till-you-drop” mentality towards a more niche, flexible, and experience-based approach to travel, as reported by Reuters.

This suggests a continued weakened consumer confidence, which alongside the downturn in the property sector, makes the sustainability of the service sector recovery uncertain. The willingness to spend more on travel and services that Chinese households showcased during the 2024 CNY may not be enough to revert the decelerating growth trend that has characterized China’s economy in recent months.

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