BEIJING — People in China are overtaking the pandemic and going on a trip, preliminary data for the Lunar New Year holiday show.
«Pent-up demand is being released as many people rush to scenic spots, watch fireworks and crowd restaurants and hotels,» Nomura’s chief China economist Ting said Thursday. Lu, in a report.
China’s Covid «exit wave» is rapidly ending as official data shows a drop in infections, hospitalizations and deaths, he said. “China quickly achieved herd immunity against Covid, as the 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 strict contact tracing and border controls. The seven-day Lunar New Year, which officially started on Saturday, is the first big holiday since the end of China’s Covid restrictions.
In the country, bed and breakfast bookings have more than doubled from a year ago, while ticket sales for attractions have increased more than fivefold, according to Trip.com data for the first four days of the Lunar New Year.
The travel booking site claimed that during those four days, hotel bookings and other tourist activities exceeded levels seen for the same period in 2019, before the pandemic.
Mainland Chinese people were also eager to travel abroad.
Flight bookings for mainland travel to overseas destinations in the first four days of the holiday quadrupled from a year ago, while related hotel bookings doubled, Trip.com said. .
Travel vs major expenses
It is less clear whether the tourism boom means that consumption in China is on track to recover from the slump of the past three years. Retail sales fell 0.2% in 2022.
According to the Department of Transport, daily domestic travel for the Lunar New Year holiday period so far – since January 8 – is up about 50% from a year ago.
But even the tens of millions of trips made each day are still down sharply from 2019 levels, the ministry said.
«Mall foot traffic, new home purchases and auto sales data suggest consumption of large tickets may remain subdued,» Nomura’s Lu said.
“Retail passenger car sales growth in volume fell noticeably to -21.0% year-on-year from January 1-15, from 3.0% in December, after the end of the purchase tax cut 50% over seven months,” he said in the report.
Chinese households’ inclination to save hit record highs last year amid uncertainty about future incomes and a slumping property market. The bulk of household wealth in China is in real estate.
For people in China planning to spend more in physical stores this year, supermarkets rank first, followed by convenience stores, according to a survey by Oliver Wyman in December. Shopping centers are less highly ranked.
However, the sentiment can change quickly.
The study found that in just one week at the end of December, survey respondents had become significantly more comfortable venturing outdoors.
“We think this is a very positive sign of resilience and how quickly consumer confidence will improve,” Oliver Wyman partner Imke Wouters said in a phone interview earlier this month. «Retail sales are directly linked to consumer confidence.»