China's Lunar New Year tourism revenues surge, but sustainability concerns linger

Tourism revenues in China surged significantly during the Lunar New Year holidays, marking a remarkable rebound from previous years, according to official data released on Sunday.

As per a Reuters report, the data revealed a staggering 47.3 per cent year-on-year increase in tourism revenues, surpassing 2019 levels. This surge was attributed to a domestic travel boom fuelled by a longer-than-usual break, which saw tourist attractions across the country bustling with massive crowds. Despite the positive figures, concerns linger regarding the sustainability of this tourism boost, especially as tourism revenue per trip remained below pre-pandemic levels.

During the Lunar New Year holiday, often dubbed as the world's largest annual migration, domestic tourism spending witnessed a remarkable jump, reaching $87.96 billion, a 47.3 per cent increase from the same period in 2023.

The number of domestic trips taken during this period also saw a substantial rise, growing by 34.3 per cent compared to the previous year, totalling 474 million. When compared to the 2019 Lunar New Year holiday, before the onset of the COVID-19 pandemic, domestic tourism spending showed a notable increase of 7.7 per cent, with domestic trips rising by 19 per cent. It's worth noting that the holiday in 2024 lasted for eight days, one day longer than the 2019 Lunar New Year break.

Goldman Sachs analysts noted an increase in domestic tourism during the Lunar New Year holiday compared to previous years.

However, they noted that tourism revenue per head softened, remaining below pre-pandemic levels, indicating ongoing "consumption downgrading". This sentiment reflects broader concerns about the strength and sustainability of China's economic recovery amidst lingering deflationary risks.

The Lunar New Year holiday, also known as the Spring Festival, traditionally sees millions of people travelling across the country to reunite with family members. Despite the challenges posed by the pandemic, international travel also saw a significant increase, with around 13.52 million inbound and outbound trips recorded during the holiday period.

This represents a growth of 2.8 times from the same period last year, signalling a gradual revival in international travel activity. However, total entry-exit trips during the holiday remained at 90 per cent of 2019 levels, indicating a partial recovery in cross-border travel.

Aside from traditional travel activities, entertainment also played a significant role during the holiday period. Film watching emerged as one of the most popular activities, with the country's box office revenue surpassing $1.11 billion over the eight days, setting a new record high. This underscores the resilience of China's entertainment industry despite broader economic challenges.

(With inputs from Reuters)