China's Lunar New Year celebrations in 2024 revealed a remarkable recovery in domestic travel and spending, surpassing pre-pandemic levels. With 474 million trips made and 632.7 billion yuan spent, this resurgence signals a potential leap forward in the country's economic narrative and consumption dynamics.
During the holiday, known as the world's largest annual migration, tourist attractions across the country witnessed massive crowds. With the conclusion of the Chinese New Year holidays, people have now returned to their everyday life, and the statistics of the new year holiday have now been revealed.
Amid the COVID-19 pandemic and its aftermath, travel activity had plummeted to unprecedented lows. However, this year presents a remarkable turnaround as travel activity has not only rebounded to pre-pandemic levels but has also surpassed the figures from 2019, the last unaffected year before the onset of the global health crisis.
Surpassing pre-covid levels
China's Lunar New Year celebrations in 2024 marked a significant resurgence in domestic travel, exceeding pre-pandemic levels. According to the Ministry of Culture and Tourism, domestic tourism trips during the Spring Festival holiday surged by 34.3% from the previous year, totaling 474 million trips. This represents a remarkable 19% increase compared to pre-pandemic levels in 2019.
Accompanying the surge in trips was a substantial rise in domestic tourism spending, reaching 632.7 billion yuan ($87.96 billion), a 47.3% increase from the same period in 2023. Average spending per trip increased to 1,335 yuan, indicating a renewed confidence in travel among consumers.
Railway travel played a pivotal role in the holiday festivities, with nearly 16.07 million railway trips recorded on the final day alone, setting a new single-day record. Throughout the eight-day holiday period, Chinese railways reported a total of 99.46 million passenger trips, highlighting the robustness of travel activity.
In addition to domestic travel, international travel also experienced a resurgence, with approximately 13.52 million inbound and outbound trips recorded during the holiday. Despite lingering uncertainties, the total entry-exit trips during the holiday returned to 90% of the levels observed in 2019, signifying a significant recovery in cross-border travel.
Implications of the Resurgence in Chinese New Year Travel
The resurgence in Chinese New Year travel carries significant implications for consumerism in China, potentially indicating a leap forward in the country's economic narrative. As the nation's most important holiday, the Lunar New Year serves as a key barometer for measuring consumption trends.
The rebound in consumer spending is crucial for China's overall economic recovery. In 2023, final consumption contributed 82.5% of total GDP growth for the year, highlighting its significance as the biggest growth driver.
The increase in travel and spending during this period serves as a strong indicator of consumer confidence. Box office ticket sales surged during the holiday period, reaching over 8 billion yuan—a record high. This increase in movie ticket sales reflects the broader revival in consumer spending and suggests an improvement in consumption patterns.
Online transactions also saw a robust increase in both volume and value during the Spring Festival holiday. NetsUnion Clearing Corporation and China UnionPay handled a combined average of 2.63 billion online transactions each day, up 18.6% from the previous holiday season. The daily average transaction value involved increased by 8%, reaching 1.25 trillion yuan.
International flight bookings surged 14-fold compared to the previous year, reflecting a broad-based revival in consumption patterns. Additionally, there was a significant uptick in overseas hotel bookings and transactions through popular payment platforms like WeChat Pay and Alipay.
Navigating the Challenges Ahead
The resurgence in Chinese New Year travel and consumer spending during the 2024 holiday period paints a picture of optimism for China's economic recovery. However, as the holiday in 2024 lasted for eight days, one day more than the Lunar New Year break in 2019, attention must be paid to the sustainability of this consumption boost.
While the data may offer temporary relief to policymakers amidst deflationary risks and weak consumer demand, the sustainability of the tourism boost remains uncertain. Tourism revenue per trip still falls short of pre-pandemic figures, indicating a nuanced recovery path.
The underlying data reflects the resilience of China's domestic market and the strategic focus of Chinese policymakers on stimulating domestic consumption amid deflationary pressures. However, economists caution that travel spending alone isn't sufficient to offset weaker sales of durable goods. Passenger car sales, for instance, fell 26% in January compared to December, according to the China Association of Automobile Manufacturers.
Investors may also be awaiting additional stimulus and easing from Chinese policymakers to support the economy further this year. The People’s Bank of China, for instance, refrained from cutting a key policy interest rate recently as officials balance options for spurring economic growth with concerns about currency depreciation.
While there are reasons for cautious optimism, it's essential not to draw hasty conclusions based solely on this year's New Year travel and consumer spending. The challenges ahead underscore the need for continued vigilance and adaptability in navigating the complexities of China's economic landscape.