China experienced a significant increase in tourism revenues during the eight-day Lunar New Year holidays, surpassing pre-COVID 2019 levels. The surge of 47.3% year-on-year was primarily driven by a boom in domestic travel, providing temporary relief to policymakers in the face of deflationary risks due to weak consumer demand. It is worth noting that the sustainability of this tourism boost remains uncertain, despite the impressive numbers.
Massive Crowds at Tourist Attractions Across the Country
During the world’s largest annual migration, tourist attractions across China witnessed massive crowds, reflecting the strong domestic tourism spending. Data from the Ministry of Culture and Tourism revealed that domestic tourism spending jumped by 47.3% to 632.7 billion yuan ($87.96 billion) compared to the same holiday period in 2023. Notably, this figure also marked a 7.7% increase from pre-COVID levels in 2019, showcasing the resilience of the tourism sector.
The number of domestic trips made during this year’s holiday grew by 34.3% from the previous year, totaling 474 million trips. This figure surpassed pre-pandemic levels in 2019 by 19%, highlighting the strong recovery in domestic travel. Furthermore, the average spending per trip during the holiday reached 1,335 yuan, showing an increase compared to 2019 levels.
For international travels, China witnessed around 13.52 million inbound and outbound trips during the holiday, a significant increase from the previous year. The total entry-exit trips during the holiday returned to 90% of the 2019 levels, indicating a gradual recovery in international tourism. Additionally, film watching became one of the most popular entertainment activities during the holiday, with the country’s box office revenue exceeding 8 billion yuan over the eight days, setting a new record high.
Challenges Faced by the Economy and Policy Responses
Amid challenges such as a property downturn and sluggish demand, China’s economy has been navigating through complex issues since last year. Policymakers have implemented measures such as cutting interest rates to stimulate growth, especially in the face of deflationary pressures. As authorities work towards striking a delicate balance to support the economy, China’s central bank opted to leave a key policy rate unchanged on Sunday, signaling the cautious approach towards addressing the evolving economic landscape.
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