Chinese Golden Week sees domestic spending drop, overseas trips surge

Domestic Spending Reaches Four-Year Low

Chinese travellers' average spending per domestic trip during the recent seven-day Golden Week holiday declined to a four-year low, according to Reuters calculations based on government data published on 9 October. The average expenditure was 893.92 yuan (US$133.51), marking a 1.9 per cent decrease from 911.04 yuan recorded a year earlier.

This represents the lowest average spending since 2022, when the figure stood at 680.60 yuan amidst stringent COVID-19 restrictions in China. The National Day holiday is a key indicator of consumer confidence in China, which has seen weak spending in recent years.

Outbound Travel Sees Significant Uptick

This reduction in domestic spending coincided with a marked increase in outbound international travel, driven by a longer potential holiday period. Many travellers combined the Golden Week, which began on 1 October, with the Mid-Autumn Festival from 25 to 27 September, allowing for extended vacations of up to 13 days.

Online travel agency Trip.com Group reported that over half of its outbound flight bookings were for departures before 1 October, with average trip durations exceeding nine days. Furthermore, bookings for foreign hotel stays of at least seven nights rose 123 per cent year-on-year, and multi-destination itineraries increased by 84 per cent.

Traveller Preferences and Future Outlook

A survey conducted by marketing firm Dragon Trail International in August revealed that 54 per cent of respondents intended to travel overseas during the holiday period, an increase from 35 per cent in the previous year.

The survey also indicated that value remained a primary consideration for these travellers, with 33 per cent preferring mid-range accommodation, while only 5 per cent opted for luxury hotels. Looking beyond the recent holiday, Spring Tour, the tourism arm of Shanghai-based Spring Group, noted that visa application volumes in September more than doubled compared to a year ago. Popular destinations included Italy, Spain, France, Australia, the United States, and Canada.

Domestic Hospitality and Entertainment Trends

The trend of restrained domestic spending was also evident in China's hospitality sector. InnHome data, cited by Jefferies analysts, showed that average revenue per available room for the period of 1 to 5 October slipped 0.5 per cent year-on-year, with average daily room rates falling by approximately 2 per cent.

The entertainment industry also felt the impact, as cinema revenue during the holiday totalled 1.16 billion yuan, a 36.6 per cent decline from the previous year, making it the lowest National Day holiday box office since 2014, according to Chinese film industry analysis platform Maoyan.

Citi analysts attributed this to a scarcity of major film releases and travellers prioritising trips over cinema visits. Spring Group anticipates continued growth in outbound travel demand through the fourth quarter and into next year.