China’s travel industry faces reality check of ‘worst ever’ season

Over the summer and Mid-Autumn Festival peak travel seasons, China’s major cities buzzed with tourists, with travel data painting a picture of a vibrant recovery.
However, the reality for many in the tourism industry tells a different story, with operators lamenting the peak seasons as the “worst ever”, and some struggling businesses faring worse than during the darkest days of the coronavirus pandemic.
“I have never seen [business during] a ‘golden week’ so dismal, it’s worse than the quietest of the off season,” said Guan Wenlu, COO of Dear Voyage, a Chinese travel agency focused on high-end travel.
Travel agents from across China share the same disappointed sentiment, dumbfounded Guan added, with businesses during China’s ongoing seven-day “golden week” National Day holiday – which this year started on Tuesday – traditionally filled bustling with crowds, vibrant peaks of activity and overflowing coffers.
The stark contrast highlights a profound crisis lurking beneath the surface of apparent prosperity, marked by China’s weak consumer spending, as many travellers remain reluctant to open their wallets amid broader economic anxieties.
“Most hotels didn’t raise prices [for the golden week holiday], and compared to the same period last year, current bookings might only reach 60 to 65%, and half of what was seen in 2019,” said Shen Qianyu, a travel agent from Sanya, a traditional tourist hotspot in China’s southern island province of Hainan.
On paper, though, China’s travel data paints a far more optimistic picture.
According to the Ministry of Culture and Tourism, 107 million domestic trips were made during the three-day Mid-Autumn Festival holiday in mid-September, up by 6.3% compared to the same period in 2019.
Total tourist spending also stood at 51 billion yuan (240 billion baht), representing an 8% increase compared to 2019.
And expenditure per person was around 477 yuan, compared to 450 yuan in 2019.
According to the China State Railway Group, a record 887 million passengers were transported nationwide by rail during the 62-day summer travel in July and August, a year-on-year increase of 6.7%.
Major domestic airlines also reported elevated numbers of flights and passengers during the summer.
“Tourism industry professionals never look at the statistics, because we wouldn’t be able to understand them,” Guan added.
“The more you look at it, the more foolish you feel about yourself.”
During the summer, the southern province of Guizhou, the western Xinjiang Uygur autonomous region and the northwest provinces of Gansu, Shaanxi and Qinghai, as well as the Ningxia Hui autonomous region, all experienced good visitor numbers.
Interest in the southwestern province of Yunnan has also been high, but low consumer spending has dampened overall sentiment among operators, according to Zhang Haoxi, founder of Travel Zone, a travel industry publication.
“The ups and downs felt by the market on the front line starkly contrast with the so-called grand narratives of macroeconomics,” Zhang said.
One high end guest house owner in Qinghai reported just 30% occupancy during the golden week holiday, according to Zhang’s survey of travel agents.
The ongoing trend of spending cutbacks in China has intensified despite a raft of policies and pledges, as consumers become more frugal amid an economic downturn and weak income growth expectations.
“Many people are telling me they can’t make it until the Spring Festival,” added Dear Voyage’s Guan, referring to the Lunar New Year holiday, which traditionally takes place in January and February each year and includes the annual 40-day chun yun travel period.
“People think Xinjiang is crowded with people, but countless guest houses in Xinjiang are lining up to be sold? Not to mention in Lijiang and Dali [in Yunnan province].
“I don’t think it can get any harder than this.
“Right now, it’s tough – extremely tough. During the pandemic, people could accept it because that phase was considered a force majeure. Everyone knew it was beyond our control, and businesses were mostly operating at minimal cost.
“But now, we’re running at full cost, so for many in the industry, it’s not any better than it was during the pandemic.”
Cun Xiaoqin, a travel agent in Yunnan province offering customised trips and a high end hotel, said her business during the summer had fallen by half compared to a year earlier, with the occupancy rate at the hotel down by two thirds.
Yunnan province boasts breathtaking and diverse natural beauty, along with a rich historical heritage, and is often regarded as a bellwether for domestic tourism.
“Overall, the booking rates for high-end hotels have dropped significantly compared to last year, while mid- to low-end hotels have seen a noticeable increase,” Cun said.
Cun added that mid- to high-end hotels had seen minimal price increases during the summer, while the mid- to low-end segment had seen substantial increases.
She also pointed out that bookings during the National Day holiday were limited, but that there is a spike after golden week.
“Overall, the volume during the period after the holiday is much better than the same time last year – roughly double,” she added.
The figures reflect a shift in behaviour among Chinese tourists, as they increasingly prefer to avoid travelling during crowded holidays and opt for off-peak trips instead, analysts said.
“More tourists doesn’t necessarily make it easier for travel agencies to make money,” Cun said.
“There were still plenty of tourists, but for us travel agencies, it means adjusting our products and strategies to adapt to market changes.”