Pinned down by property paralysis, China needs a big holiday but they’re getting a long staycation instead
The initial signs are that China is on the cusp of a potentially revivifying holiday season as the first mass transit tix go on sale for the looming double trouble vacation threat – where the annual Zhongqiu Jie (中秋节) runs directly into the other great day for down tools, China’s National Day.
China’s central rail transport authority says it’s already seeing a huge uptake in both train and airline tickets for the extra-special holiday which could restart a nation.
Also called Mooncake Festival or the Moon Festival, Mid-Autumn is traditionally the second most important festival in China after Chinese New Year.
Mid-Autumn is so much of an official public holiday, they officially renamed it Golden Week.
This year, the festival falls on September 29, right before China’s National Day on October 1, so mainlanders will be enjoying a special eight-day break (from September 29 to October 6).
It seems a lifetime ago, but there was once a world (back in innocent 2019) when Chinese tourists both foreign and domestic provided the cherry on the cake for an economy buzzing with activity.
Not only had China tourists suddenly become a driving force for economies and destinations much like our own, but in a few quick years they got right up there with the very biggest-spending, very best-traveled voyagers on the planet.
Over the weekend, China Railway told – or was ordered to tell (or the other way round) – local media that the rush for tix was unprecedented and attracted a record buying spree on the state-run 12306.cn website when they became available on Friday.
The portents are all good. China’s COVID-19 era restrictions are now done and dusted, and China Railway just struck “a new single-day record in ticket sales”, flogging 22.9 million tickets on Friday alone, according to the terrific state news agency Xinhua.
The China Tourism Academy has also looked into its state-provided crystal ball and foreseen domestic tourism is on the return, and could clock 90% of pre-pandemic levels this year.
But that alone won’t offset the impact of lower consumer confidence. Part of the reason is that the amount of money travellers are willing to spend is down.
And while the Mid-Autumn Festival this year overlaps into the National Day break – delivering a handy extended holiday opportunity, the excitement is tempered by gnawing fears that deflated Chinese consumer confidence could still greatly hinder travel-spend.
The official holiday starts on September 29, a Friday, and runs through until October 6.
According to Miami University’s Zhiyong Yang, a professor of marketing and an expert in the Chinese travel sector, zero-COVID hit the once thriving local travel agency industry like a highly transmissable global pandemic.
“From January to April 2022, some 8,500 tourism agents and firms declared bankruptcy. Even assuming some reopen, that churn and disruption bode ill for the sector.”
And though China Railway predicts around 190 million railway trips will be made during the 12-day travel rush from September 27 to October 8, Professor Yang says it’s the calamitous state of China’s humungous, but faltering residential property sector which is sucking all the oxygen out of the travel splurge economic officials would like to see.
The systematic failures which have led to the near decimation of property giants like China Evergrande and more recently Country Garden have been an appalling shock for a general population and the circa 70% of their entire assets which are invested in real estate.
In July 2023, new home sales from China’s top 100 developers were down 33% from the previous year. Prices are slumping, too.
Yang says this has had “a cascade of effects on the Chinese economy”.
“Most immediately, as demand for construction materials and labor has fallen, hiring has cooled and consumers are tightening their belts. Local governments are also struggling to stay afloat with less revenue, with some provinces being forced to slash government salaries and benefits.”
Then there’s bang for Renminbi. China continues to put new measures in place to boost its economy and put a halt on the decline of the Yuan v the USD.
The Chinese currency could see more gains if Chinese banks continue to support it, says Duc Nam Pho, director at Kama capital.
“China has also instructed some brokerage companies to reduce their proprietary foreign exchange trading in this regard. In addition, the yuan was boosted by better-than-expected growth in industrial production and retail sales, further bolstering traders’ confidence.”
Which is all helping explain why this upcoming Mega Holiday will be a staycation of epic proportions. In China, Mid-Autumn Festival is a reunion time for families, perhaps a bit like Thanksgiving in the States – Chinese people celebrate it by gathering for dinners, but instead of Turkey, Chinese worship the moon, eat awful mooncakes and make beautiful lit paper lanterns.
The suddenly thrifty, spend-conscious Chinese, staring down record youth unemployment, are staying local.
This year, according to the new numbers, Chinese travellers will make x2 the 72 million trips made during the same holiday last year and well above the 138 million trips made in 2019 before the Covid pandemic.
But, although recent retail data shows spending improved in August – for the first time – with much of their wealth locked up in shrinking property assets shrinks Professor Yang says that cautious consumers are increasingly prioritising their savings.
“Worsening the economic challenge for businesses across the country.”
In 2019, China was Australia’s leading visitor market with Australia welcoming 1.4 million visitors from China, contributing $12.4 billion in visitor spend.
In the same year, it’s thought Chinese outbound tourism generated circa US$250bn in all overseas travel. A number which outpaced their nearest rivals, the outbound American, by double.
That year, as COVID-19 began its quiet initial gestation, Chinese travellers logged more than 150mn international flight departures.
Happy times, indeed.
The Aussie Bureau of Statistics (ABS) reckons international arrivals back in April show visitations from China to Australia returned to one-third of 2019 levels. But they also noted that over 2022-23, more holiday-makers landed on Aussie airport tarmac for a short-term stay from the city-state of Singapore than from all of China.
The COVID-19 response inside Chinese absolutely decimated the travel industry over there. I mean, it hit everyone’s tourism sector, but China’s zero-COVID policies and the policing of them made the very idea of leaving the house crazy-thought.
The tighter the pandemic restrictions, the more excited tourism dependent sectors got about a post-COVID China travel boom.
That’s not been forthcoming and Chinese tourists have been slow to return to the global skies.
One of the major problems for us has been the Chinese travel has also been hampered by a series of product bans and tariffs the country started to impose on Australia in late 2020 after bilateral relations deteriorated.
Last month, as chilly ties with Beijing began to shows signs of a thaw, China’s culture and tourism ministry named us, among other destinations like Japan, South Korea and the US, in an updated list of open countries that Chinese tourism agencies can send their lucrative group tours to for the first time since outbound travel was halted due to the pandemic.
Since then, the tourism sector’s been prepping to welcome a wave of Chinese tourists.
Group tours are largely the travel mode of choice for Chinese adventurers looking to spend some cash and manufacture some team memories. Chinese travel agents have said that group tours represented well over 30% of Australia’s pre-pandemic Chinese leisure travel dollars.