China’s Golden Week travel boom masks a bruising price war

BEIJING — The latest motion of hyper-competition, oregon "involution," has emerged successful China's tourism industry, adding to concerns astir growing deflationary pressure successful the broader economy.

Over the Oct. 1 to 8 nationalist vacation — dubbed "Golden Week" — full home tourism trips reached 888 cardinal and generated 809.01 cardinal yuan ($113.63 billion) successful revenue, according to authoritative information released Thursday. That's up by 1.8% and 7.6% from past year, respectively, according to CNBC's calculations of the figures.

The gains, however, slowed from the May 1–5 vacation earlier this year, erstwhile home trips and tourism gross grew 6.4% and 8% respectively. In fact, mean spending per home tourer travel during the Golden Week was besides astir 3% little than successful 2019 earlier the pandemic, Goldman Sachs pointed retired Thursday.

"The Golden Week was 'Golden Weak,'" said Mix Shi, laminitis of PoshPacker Hostels Chengdu Group.

Although his 3 hostels successful the metropolis ended up being afloat booked, Shi said helium had to chopped nightly rates by astir 60% — due to the fact that adjacent hotels dropped prices adjacent more.

"Way excessively overmuch wealth has been pouring into the edifice manufacture lately," Shi said, noting, "the contention is insane, and immoderate truly bully places are going for ungraded cheap. It's large for travelers due to the fact that they person much choices, but it's a existent stroke to hostels."

Chengdu, the superior of Sichuan state successful southwestern China, ranked 2nd to Nanjing, superior of Jiangsu state successful the east, successful tourism spending for the vacation connected the Meituan online booking platform.

Among section and planetary visitors to hostels successful mainland China, Chengdu's popularity much than doubled from past year's Golden Week, 2nd lone to Shanghai, according to HostelWorld. Still, mean furniture prices fell much than 20% successful some cities — to 165.70 yuan ($23.27) successful Shanghai and 80.99 yuan successful Chengdu.

While astir locals person lone a fistful of paid days disconnected each year, China has sought to promote businesses to springiness workers much abrogation days and extended authoritative nationalist holidays to boost consumption.

This year's Golden Week was 1 time longer than accustomed due to the fact that it coincided with the Mid-Autumn Festival, which follows the agrarian calendar. The festival fell connected Oct. 6 this year, versus Sept. 17 past year.

"The Mid-Autumn Festival is considered to beryllium a household reunion festival," said AJ Wang, proprietor of the X Hotel and Observatory Hill House venues successful the northeastern coastal metropolis of Qingdao.

"The existent Golden Week, successful presumption of gross generation, really ends connected the 6th," helium said, noting helium had to chopped prices aft that day by 60% owed to falling demand.

Official home tourism gross for the Golden Week unsocial roseate by 15.4% from 2024, but erstwhile including past year's Mid-Autumn Festival gross figures, the comparable gross maturation slowed to 7.6%, CNBC calculations showed.

"Everyone's moving harder, spending more, but the nett spread stays small," said Sasa Yau, who runs a hostel and edifice successful the confederate metropolis of Guangzhou.

Yau said his regular edifice income surged from the emblematic 3,000 yuan to arsenic overmuch arsenic 10,000 yuan during the Golden Week, with the mean lawsuit spending conscionable 30 yuan.

"We were busier than ever and broke our gross record," Yau said. "There are lone 4 of america moving the show, truthful by the extremity of the week we were truthful bushed that erstwhile I said, 'Let's observe with a late-night meal!' everyone conscionable said, 'Can we observe by sleeping instead?'"

In Chengdu, celebrated for its Giant pandas and spicy food, Shi said travelers thin to publication rooms lone a time oregon 2 successful beforehand alternatively of a week oregon 2 ahead, making accommodation rates unpredictable

China's immense web of high-speed trains and airports — with flights sometimes cheaper than bid tickets — has made travelling connected a whim reasonably easy. Large terms swings and challenges successful booking tickets for the archetypal oregon past time of a nationalist vacation are pushing travelers to stagger their trips erstwhile imaginable — and prevention money.

Many tourists chose to question somewhat earlier oregon aft the Golden Week play this year, according to Chinese question booking tract Trip.com. It noted that hotel prices successful precocious September were astir 20% cheaper than during the Golden Week, portion mid-holiday airfares were much than 30% cheaper than astatine the commencement of the break.

Alibaba-owned question booking tract Fliggy said mean spending per question booking roseate 14.6% from a twelvemonth earlier, and noted that acold cheaper flights started the play aft the holiday, specified arsenic a formation from Shanghai to Hong Kong for little than 400 yuan ($56).

Official figures besides pointed to a emergence successful roadworthy trips, with the vacation seeing an average of 304 cardinal trips per day, mostly by car.

"The Golden Week unleashed a question of vigor crossed China: record-breaking travel, booming concern activity, and caller spending trends each gave home request a coagulated boost," said Bruce Pang, adjunct subordinate prof astatine CUHK Business School.

"Still, it mightiness instrumentality a portion earlier the [consumer terms index] returns to affirmative [year-on-year] growth, arsenic nutrient prices and lipid prices stay brushed compared to their peak," helium said.

China's authoritative user prices fell by 0.4% successful August from a twelvemonth earlier but roseate 0.9% erstwhile stripping retired nutrient and vigor prices. The tourism sub-segment saw prices emergence 0.7% twelvemonth implicit twelvemonth successful August, but they were 0.3% little for the January to August period compared with the aforesaid play successful 2024.

Travel platforms besides reported accrued request successful smaller cities, wherever prices tin beryllium acold lower. Chinese booking tract Tongcheng said edifice bookings successful astatine slightest 30 specified cities and little developed areas more than doubled from a twelvemonth ago.

China's ostentation information for September is owed Oct. 15, and retail income connected Oct. 20. Retail income rose just 3.4% in August from a twelvemonth ago, missing analysts' expectations.