China’s economy continues to struggle, with the impacts being seen not only in reduced expenditures but also in the travel plans of Chinese people for the Lunar New Year. Due to the severe economic situation in China leading to declining incomes, many individuals are opting for cheaper domestic trips or destinations in Asia.
A report by Bloomberg highlights the story of Chen Xing, a financial professional at a state-owned asset management company in Guangzhou. Before the outbreak of the pandemic, she used to fly to Europe for a two-week skiing trip during the Chinese New Year period. However, over the past two years, her salary has remained stagnant and her bonuses have halved.
This year, she waited for last-minute deals and booked a trip to Osaka. Her budget has also been slashed from a previous $10,000 to $2,000, opting for a hotel that costs only 300 yuan ($40) per night, a far cry from the luxury accommodations she used to enjoy.
“This feels more like a trip to comfort myself,” she said. “It also reflects the struggles I have during this difficult period. You have to cut back on all your expenses, but still need to spend money to enjoy some fun to relieve the pressures of work and life.”
The prolonged zero-COVID measures in China have severely impacted the economy, with a prolonged real estate crisis further eroding the wealth of many Chinese people. Currently, a bleak job market, falling property prices, and uncertainties regarding the national pension system and other benefits are undermining consumer confidence among Chinese citizens. Most people feel pessimistic about their job security and future prospects. The series of economic stimulus measures implemented by the CCP in 2024 have all failed, leading people to continue saving money to prepare for the next crisis.
According to a report by Bloomberg, China Trading Desk, a digital marketing and research company, estimates that during the eight-day holiday period starting on the eve of January 28, around 2.2 to 2.6 million people will travel abroad. While this figure represents a 30% increase from the low base of last year, it still remains below pre-pandemic levels when overseas travel reached a peak of 6.3 million people.
The choice of holiday destinations also reflects Chinese people’s inclination towards domestic travel. The reduction in Chinese travelers also necessitated a readjustment for airlines, retailers, hotels, and other businesses.
“Chinese travelers are becoming more selective,” said Subramania Bhatt, CEO of China Trading Desk, to Bloomberg. “They seek value and experience. We won’t see the huge influx of Chinese people into large luxury stores, buying bags in large quantities anymore.”
Luxury companies like LVMH Group and Gucci’s owner Kering Group are experiencing a steady slowdown in sales in China, highlighting the shift in spending habits among affluent Chinese individuals.
Increasingly, Chinese travelers opting to vacation abroad are choosing neighboring countries like Japan and South Korea, while Southeast Asian countries like Malaysia and Thailand are attracting Chinese tourists with visa-free entry and lower costs. Expensive long-haul destinations like the United States and Europe are not a priority for Chinese travelers this year.
Data from online travel platform Feizhu shows that as people seek more economical choices, neighboring Japan is becoming a popular destination, with the depreciation of the Japanese yen being one of the reasons attracting Chinese visitors.
Japan, Thailand, South Korea, and Malaysia are the top four outbound travel destinations for Chinese people during the Chinese New Year, according to China Trading Desk data.
Angela Blair, General Manager of the International Department at Tourism New Zealand, stated that as of October 2024, annual inbound data indicated that the number of Chinese tourists had recovered to 60% of pre-pandemic levels.
Blair noted, “We may see an increase in visitor numbers during the Chinese New Year, but this growth may not return to the levels of 2019.”
Furthermore, Bhatt mentioned that due to people waiting for last-minute deals, nearly three-quarters of travelers booked their trips less than a month in advance.
Feizhu data shows that this month, one-way flights from Shanghai to Jeju Island, a popular tourist destination in Korea, are priced as low as 284 yuan. Bhatt mentioned that compared to last year’s Chinese New Year period, the average airfare and hotel prices from China to Hong Kong have decreased by 20%.
The Civil Aviation Administration of China stated that during the 40-day Spring Festival travel period starting on January 14, it is expected that the number of domestic and international airline passengers will reach 90 million, an increase of nearly 8%, significantly lower than the 51% increase seen in 2024, the first year after the reopening post-pandemic.