China tourism rebounds over Golden Week but still below last year

SHANGHAI/BEIJING (Reuters) - Domestic tourism in China saw a robust rebound over the just-ended Golden Week holiday, encouraged by the country’s success in stamping out the novel coronavirus, although levels were still well short of last year.

People arrive at Beijing Railway Station after an eight-day National Day holiday following the outbreak of the coronavirus disease (COVID-19) in Beijing, China, October 9, 2020 REUTERS/Thomas Peter

Tourism sites were visited by 637 million domestic tourists over the eight-day National Day holiday that started Oct. 1, 79% of last year’s total, China’s Ministry of Culture and Tourism said in a statement on Thursday.

Domestic tourism revenues stood at 466.56 billion yuan ($68.7 billion), it added, down from nearly 650 billion yuan a year earlier.

That, however, marked an improvement from China’s last long holiday period over May 1-5 for Labour Day, when 115 million domestic tourists travelled and tourism revenues were only 47.56 billion yuan.

Since then, COVID-19 cases have ebbed, with no new community transmissions in mainland China since early August.

“The quick rebound may have alleviated concerns about China’s growth momentum, but it is too early to be complacent,” Betty Wang, senior China economist at ANZ, wrote in a note.

The October Golden Week figures undershot last year’s levels, even though the holiday period was extended this year by a day as it overlapped with China’s mid-autumn festival.

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The figures also defied some expectations that domestic tourism would be much stronger with cross-border travel restrictions and a dearth of international flights deterring millions of Chinese nationals from overseas trips.

“Tourism revenue during the holiday period only rebounded to 69.9% of last year,” Wang said, noting core inflation trended lower year-on-year to 0.5% growth in July and August, the lowest level since 2010.

The soft CPI growth suggests domestic demand remained fragile.

“We failed to see a so-called retaliatory rebound (in consumption),” said Zhang Qidi, visiting researcher at the Center of International Finance Studies at the Central University of Finance Studies in Beijing.

Zhang does not expect consumer spending to perform strongly in the near term, noting that middle and low-income households have been hit by the economic fallout of the pandemic.

Household income fell 1.3% on the year as of end-June versus a 5.8% increase at end-December, according to official data.

“It will still take a long time for income growth to return to normal,” Zhang said.

Separate data from the commerce ministry showed average daily sales at key retail and catering enterprises rose 4.9% over the October holiday period from a year earlier, with sales totalling 1.6 trillion yuan ($238 billion).

It also noted strong car sales growth in some areas around the country, with sales in Beijing 23.5% higher.

Car trips featured prominently this year, according to state media, contributing to highway congestion and also indicating continued caution over coronavirus transmissions and outbreaks.

($1 = 6.7898 Chinese yuan)

Reporting by Andrew Galbraith, Sophie Yu and Ryan Woo; Editing by Edwina Gibbs