China’s Golden Week’ journey growth masks a bruising value struggle

BEIJING — The newest signal of hyper-competition, or “involution,” has emerged in China’s tourism trade, including to considerations about rising deflationary strain within the broader economic system.

Over the Oct. 1 to eight public vacation — dubbed “Golden Week” — complete home tourism journeys reached 888 million and generated 809.01 billion yuan ($113.63 billion) in income, based on official information launched Thursday. That’s up by 1.8% and seven.6% from final 12 months, respectively, based on CNBC’s calculations of the figures.

The beneficial properties, nonetheless, slowed from the May 1–5 vacation earlier this 12 months, when home journeys and tourism income grew 6.4% and eight% respectively. In reality, common spending per home vacationer journey throughout the Golden Week was additionally round 3% decrease than in 2019 earlier than the pandemic, Goldman Sachs identified Thursday.

“The Golden Week was ‘Golden Weak,'” mentioned Mix Shi, founding father of PoshPacker Hostels Chengdu Group.

Although his three hostels within the metropolis ended up being absolutely booked, Shi mentioned he needed to reduce nightly charges by about 60% — as a result of close by accommodations dropped costs much more.

“Way too much money has been pouring into the hotel industry lately,” Shi mentioned, noting, “the competition is insane, and some really nice places are going for dirt cheap. It’s great for travelers because they have more choices, but it’s a real blow to hostels.”

Chengdu, the capital of Sichuan province in southwestern China, ranked second to Nanjing, capital of Jiangsu province within the east, in tourism spending for the vacation on the Meituan on-line reserving platform.

Among native and worldwide guests to hostels in mainland China, Chengdu’s recognition greater than doubled from final 12 months’s Golden Week, second solely to Shanghai, based on HostelWorld. Still, common mattress costs fell greater than 20% in each cities — to 165.70 yuan ($23.27) in Shanghai and 80.99 yuan in Chengdu.

While most locals have solely a handful of paid days off every year, China has sought to encourage companies to provide employees extra trip days and prolonged official public holidays to spice up consumption.

This 12 months’s Golden Week was sooner or later longer than common as a result of it coincided with the Mid-Autumn Festival, which follows the agrarian calendar. The competition fell on Oct. 6 this 12 months, versus Sept. 17 final 12 months.

“The Mid-Autumn Festival is considered to be a family reunion festival,” mentioned AJ Wang, proprietor of the X Hotel and Observatory Hill House venues within the northeastern coastal metropolis of Qingdao.

“The real Golden Week, in terms of revenue generation, actually ends on the 6th,” he mentioned, noting he needed to reduce costs after that date by 60% as a result of falling demand.

Official home tourism income for the Golden Week alone rose by 15.4% from 2024, however when together with final 12 months’s Mid-Autumn Festival income figures, the comparable income progress slowed to 7.6%, CNBC calculations confirmed.

“Everyone’s working harder, spending more, but the profit gap stays small,” mentioned Sasa Yau, who runs a hostel and restaurant within the southern metropolis of Guangzhou.

Yau mentioned his each day restaurant gross sales surged from the standard 3,000 yuan to as a lot as 10,000 yuan throughout the Golden Week, with the common buyer spending simply 30 yuan.

“We were busier than ever and broke our revenue record,” Yau mentioned. “There are only four of us running the show, so by the end of the week we were so tired that when I said, ‘Let’s celebrate with a late-night meal!’ everyone just said, ‘Can we celebrate by sleeping instead?'”

In Chengdu, well-known for its Giant pandas and spicy meals, Shi mentioned vacationers are inclined to e-book rooms solely a day or two upfront as a substitute of every week or two forward, making lodging charges unpredictable

China’s huge community of high-speed trains and airports — with flights generally cheaper than practice tickets — has made travelling on a whim pretty straightforward. Large value swings and challenges in reserving tickets for the primary or final day of a public vacation are pushing vacationers to stagger their journeys when doable — and get monetary savings.

Many vacationers selected to journey barely earlier than or after the Golden Week interval this 12 months, based on Chinese journey reserving website Trip.com. It noted that hotel prices in late September have been about 20% cheaper than throughout the Golden Week, whereas mid-holiday airfares have been greater than 30% cheaper than firstly of the break.

Alibaba-owned journey reserving website Fliggy mentioned common spending per journey reserving rose 14.6% from a 12 months earlier, and famous that far cheaper flights began the weekend after the vacation, comparable to a flight from Shanghai to Hong Kong for lower than 400 yuan ($56).

Official figures additionally pointed to an increase in highway journeys, with the vacation seeing an average of 304 million trips per day, largely by automobile.

“The Golden Week unleashed a wave of energy across China: record-breaking travel, booming business activity, and fresh spending trends all gave domestic demand a solid boost,” mentioned Bruce Pang, adjunct affiliate professor at CUHK Business School.

“Still, it might take a while before the [consumer price index] returns to positive [year-on-year] growth, as food prices and oil prices remain soft compared to their peak,” he mentioned.

China’s official client costs fell by 0.4% in August from a 12 months earlier however rose 0.9% when stripping out meals and power costs. The tourism sub-segment noticed costs rise 0.7% 12 months over 12 months in August, however they have been 0.3% decrease for the January to August interval compared with the identical interval in 2024.

Travel platforms additionally reported elevated demand in smaller cities, the place costs could be far decrease. Chinese reserving website Tongcheng mentioned resort bookings in at the least 30 such cities and fewer developed areas more than doubled from a year ago.

China’s inflation information for September is due Oct. 15, and retail gross sales on Oct. 20. Retail gross sales rose simply 3.4% in August from a 12 months in the past, lacking analysts’ expectations.