China’s tourism revenues during the Lunar New Year holiday exceed the pre-pandemic level

Official data has revealed a remarkable surge in tourism revenues in China during the Lunar New Year holiday, which concluded on Saturday, with a staggering year-on-year increase of 47.3 percent. This surge has not only surpassed 2019 levels but also underscored the robustness of domestic tourism amid an extended holiday period.

Breathing Space for Policymakers Amid Deflationary Risks

The significant uptick in tourism revenues may offer temporary relief for policymakers in China as they grapple with deflationary risks amidst subdued consumer demand. However, the sustainability of this tourism recovery remains uncertain, with revenues per trip still lagging behind pre-pandemic levels.

Key Figures Reflecting Tourism Boom

According to data released by the Ministry of Culture and Tourism on Sunday, spending on domestic tourism surged by 47.3 percent to 632.7 billion yuan ($87.96 billion) compared to the corresponding holiday period in 2023. Moreover, the number of domestic trips during this year’s holiday soared by 34.3 percent compared to the previous year.

Recovery Compared to Pre-Pandemic Levels

In a noteworthy comparison to the early Lunar New Year holiday in 2019, spending on domestic tourism witnessed a solid 7.7 percent increase, while domestic flights saw a notable uptick of 19 percent, according to ministry data. These figures signal a gradual but promising recovery trajectory in the Chinese tourism sector.

Challenges Facing the Chinese Economy

Despite the positive tourism data, the Chinese economy confronts several challenges, including a downturn in the real estate sector and a deceleration in demand since last year. These challenges have prompted policymakers to implement measures such as interest rate cuts to stimulate growth, despite the global trend towards tightening monetary policies.

Conclusion

While the surge in tourism revenues during the Lunar New Year holiday provides a glimmer of hope for economic recovery in China, challenges persist, necessitating proactive measures from policymakers to navigate the complex economic landscape. As the world’s second-largest economy continues its journey towards recovery, the resilience of domestic sectors like tourism remains crucial in fostering sustainable growth amid evolving global dynamics.