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China’s Golden Week Is Looking Anything But as Covid Crunches Tourism

Tourism has suffered globally due to the ongoing impact from the coronavirus, and in China even domestic travel from one city to another is slowing to the point where it’ll likely curtail some consumer spending during Golden Week.

The national holiday is celebrated annually beginning on Oct. 1 for seven days to commemorate the founding of the People’s Republic of China. Traditionally, travelers fill the airports and railways as they take advantage of the week-long celebration to attend different events. For retailers, many shopping malls offer significant discounts during the week. This year’s celebration runs for eight days because the Mid-Autumn Festival also fell on Oct. 1. says on its site that “[d]uring Golden Week, lots of Chinese go traveling. It leads to a sea of people at attraction sites; train tickets difficult to get; flight tickets cost more than usual; and hotel rooms in short supply.” But so far, word has surfaced that travel and tourist spending this year remains below normal levels, even though consumer spending locally in the cities are said to have returned to near-normal levels.

For the same period last year, 542 million were traveling. China’s Ministry of Culture and Tourism (MCT) on Sunday said that so far for the first four days of Golden Week, just 425 million Chinese were traveling, while revenues were just 312 billion yuan ($45.94 billion). Those figures suggest that this year’s total tally, even with the benefit of one additional day, will end up below last year’s total for the number traveling and revenues generated from consumer spending.  For some perspective, China’s MCT said the seven-day celebration a year ago saw 782 million domestic inbound tourists. That higher volume in travelers represented a 7.8 percent increase from 2018 figures, while revenues rose 8.5 percent to 649.71 billion yuan ($95.68 billion).

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Last month, John D. Idol, CEO of luxury firm Capri, said that the good news coming out of China was that traffic patterns have been healthy, indicating that the worst was perhaps over for the country that was badly hit when the coronavirus outbreak first hit in late January just at the start of Chinese New Year. He expects a minimum of 12 to 18 months before the retail travel sector sees a fully recovery, in part because most tourist capitals in Europe have yet to bounce back.

While Chinese consumers are shopping locally, now it looks like many have decided against traveling either outside of China or even within their country and are staying closer to home for Golden Week. Many since the start of the Covid-19 outbreak have also shifted more of their spending to online.

Retail sales in China saw 0.5 percent growth year-over-year this past August, moving into a positive rate of growth for the first time this year, the National Bureau of Statistics of China said last month, as month-to-month growth reached 1.25 percent. National online retail sales for the first eight months rose 9.5 percent year-over-year. Food sales in August saw the highest growth at 35.4 percent.

Those data points mean that while consumers are spending again, Covid-19 is impacting them in ways not unlike what’s occurring elsewhere globally. Consumers around the world have adjusted to spending online, and those new shopping habits are believed to be long-lasting. And consumers in general are focusing their spending on necessities, such as food. As for other luxuries such as apparel, consumers are still buying, but just not as much as before the arrival of the pandemic.