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China’s domestic tourism is on the way back from the lows of the pandemic, says Fitch Ratings – Latest US News Hub

China’s domestic tourism – a key indicator of retail spending – is on track to rebound after falling to an all-time low during the country’s worst lockdown, according to government data and analysts.

As the mainland’s biggest lockdown in Shanghai ended in late May, a surge in holiday bookings indicated tourism spending would recover in the second half of the year, Fitch Ratings said.

The uptick comes after tourism revenues and numbers in China hit a trough in the first half of 2022 and nearly halved compared to the same period in 2019 before the pandemic hit, Fitch added.

China-based Fitch Ratings analysts Flora Zhu and Jenny Huang said in a note late last week, “China’s relaxed Covid-19 pandemic-related travel restrictions and more targeted epidemic control measures have boosted tourism demand, despite ongoing sporadic outbreaks.”

“A slow recovery in the tourism sector has dragged down the economy due to its large contribution, accounting for around 11% of GDP and 10% of national employment in 2019.”

Tourists walk under cherry blossom trees in full bloom on Jimingxi Road on March 22, 2016 in Nanjing, Jiangsu Province, China.

VCG

The number of travelers rose more than 62% month-on-month in July, Fitch Ratings said, following a series of relaxations by Beijing – including the easing of interprovincial group travel restrictions and excessive local government mobility controls in June.

Data from online travel agencies such as Tunyu Corp showed bookings were up 112% from July, Fitch said.

Average daily tourist arrivals at top-rated, or “5A-level” tourist attractions in Xinjiang rose to 110,000 in July, compared with 19,000 in May, Fitch analysts said. The city of Dali in Yunnan, a popular tourist spot, attracted 6.9 million tourists – a 46% jump from pre-pandemic levels in 2019, they said.

The Fitch report said recent outbreaks in Hainan, Xinjiang and Tibet are unlikely to set back tourism’s recovery because these regions have fewer travelers than other countries.

But the recovery, while strong, remains patchy across the region, with short-haul tour operators in particular doing better than national sightseeing tourism companies that target national visitors.

Chinese consumers will continue to favor local and short trips amid the pandemic, the report said.

The pandemic has also changed domestic Chinese tourism, business consultancy China Briefing said in a note last week.

Group-travel destinations have lost some of their popularity as Chinese travelers turn to family vacations, health-care tours and research trips, it said.

CTrip, China’s leading online travel agent, said in its summer tourism report last month that “parent-parent-child” or family trips have increased, as opposed to traditional Chinese big bus tours.

There are signs of recovery across Chinese retail spending, including tourism.

New data on Monday showed that retail spending rose 2.7% year-on-year in July after an unexpected 3.1% increase in June, although the latest results for July fell short of analysts’ expectations for growth of between 4% and 5%.

It was the first increase in retail spending since February as spending picked up after the Covid-19 outbreak and the easing of restrictions.

In May, as Shanghai grappled with its worst lockdown ever, retail sales fell 6.7% year-on-year.

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China’s domestic tourism is on the way back from the lows of the pandemic, says Fitch Ratings


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