China’s consumption market shows positive signs for upcoming holidays

China's consumption market has shown multiple positive signs as the week-long National Day holiday period is about to start on Tuesday, with industry insiders expecting to see bustling scenes across different sectors, ranging from tourism, transport, movie-going, and catering.

As consumption during Golden Week traditionally serves as a barometer for the economy, observers said that the spending surge is likely to send an upbeat signal on the potential of China's consumption market, which remains a key economic driver.

The consumption rebound, coupled with a slew of pro-growth policies released in recent days, would also inject new impetus to consolidate the recovery of the world's second-largest economy in the fourth quarter, according to analysts.

Travel boom

Nationwide, Chinese tourists have been in "countdown" mode, eagerly packing their bags in anticipation of the week-long travel adventure during the holiday period. A Beijing-based tour guide surnamed Zhao told the Global Times that reservations for hotels and tickets to popular tourist sites for the upcoming Golden Week have soared significantly. "Tickets for iconic tourist sites in Beijing such as the Forbidden City sold out a week ago," Zhao added.

In addition to traditional popular tourism destinations like Beijing and Shanghai, some third- and fourth-tier cities have also been gaining popularity among tourists for their iconic cultural and culinary attractions. For example, the hit game Black Myth: Wukong has led to more than 30 percent growth in tourism bookings for cities in North China's Shanxi Province, which is rich in cultural legacies, media reported.

Outbound tourism is also foreseen to continue rebounding during Golden Week. Many of the popular travel products involving destinations in Europe and Africa sold out more than a month before the holidays, data from travel platform Fliggy shows, while flight bookings to destinations such as Egypt, Turkey, Hungary, and Kenya have increased more than threefold compared to the same period in 2023.

Transportation networks of Chinese expressways, railways, and civil aviation are also expected to embrace a surge during the holidays.

It is forecasted that the country's railway will handle 175 million passenger trips during the travel rush period starting from Sunday and lasting until October 8.

During the holidays, the Beijing Capital International Airport is expected to handle 1.32 million passenger trips, while the annual passenger throughput should exceed 50 million during this National Day holiday period. The number of inbound and outbound passengers at the Beijing Daxing International Airport is expected to reach 105,000, an increase of nearly 60 percent compared with the same period in 2023, the Global Times learned from the airports' operators.

The transport sector overall is expected to handle 1.94 billion passenger trips nationwide during the holidays, with a daily average of 277 million trips. The daily average is expected to rise 0.7 percent year-on-year.

"The average payment price for domestic flights has been reduced by 20 percent compared with last year, while the average price of mid-to-high-end hotels also dropped by 20 percent year-on-year," which also helped fuel the Golden Week travel rush, according to a report of qunar.com.

Economic gauge

With regards to the movie market, the total pre-sale box office for new releases during the holidays had reached over 100 million yuan ($14.26 million) as of 2:38 pm on Sunday, indicating a potential box-office rebound following a weaker-than-expected summer season.

Meanwhile, multiple localities have been rolling out cultural and tourism activities, among other measures, to further spur a consumption boom during the holidays.

On Saturday, Shanghai began distributing consumption coupons worth 500 million yuan, offering residents discounts on a wide range of purchases, from hotels and movies to restaurants and sporting events.

"Ahead of the National Day holidays, the Chinese government released a bunch of supportive policies that have largely stabilized and lifted up social expectations," said Tian Yun, an economist based in Beijing.

The strength of China's holiday consumption rebound may also shed light on the potential and resilience of the country's consumption, which is a key engine driving economic recovery momentum, analysts said.

They believed the fourth quarter is also a peak season for domestic consumption, with major consumption events like the Double 11 online shopping festival in November set to further ignite a new wave of shopping enthusiasm.