Over the summer and Mid-Autumn Festival peak travel seasons, China’s bustling cities were teeming with tourists, according to official travel data, painting an image of vibrant economic recovery and a resurgence in domestic travel. However, for many in the tourism industry, the reality was far more grim, with operators lamenting that the supposed “golden weeks” have turned into some of the most challenging periods in recent memory.
Despite what seemed to be a surge in travel on paper, the tourism sector has been grappling with a deepening crisis, exacerbated by weak consumer spending and broader economic anxieties. For many businesses, this year’s peak travel seasons were worse than the darkest days of the coronavirus pandemic.
“I have never seen a ‘golden week’ so dismal,” remarked Guan Wenlu, Chief Operating Officer (COO) of Dear Voyage, a Chinese travel agency specializing in high-end travel. “It’s worse than the quietest off-seasons. There were crowds, but they weren’t spending.”
This stark contrast between appearances and reality has revealed the fragile underpinnings of China’s consumer-driven recovery. It suggests that many travelers are still hesitant to spend freely, even during traditionally lucrative travel periods such as the National Day holiday and Mid-Autumn Festival.
The National Day holiday, known as “golden week,” which this year began on Tuesday, October 1, is typically a time of bustling activity across China. It’s one of the longest public holidays in the country, and in previous years, it has been a reliable revenue booster for the tourism industry.
Yet this year, travel agents and industry insiders from across China shared the same disheartening sentiment as Guan. “Most hotels didn’t raise prices for the golden week holiday, and compared to last year, bookings might only reach 60 to 65 percent of capacity,” said Shen Qianyu, a travel agent based in Sanya, a popular tourist destination in Hainan, the southern island province. “We’re seeing half the volume of 2019.”
Despite these bleak reports from industry professionals, China’s travel data appeared to tell a different story. 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, a 6.3% increase compared to the same period in 2019. Tourist spending also rose to 51 billion yuan (around 240 billion baht), up 8% compared to 2019.
On the surface, these numbers might suggest that China’s tourism industry is in the midst of a recovery. But the reality on the ground, as described by those working in the sector, is much more complex and troubling.
The weak performance of the tourism industry during what should have been a peak season has shed light on China’s broader economic anxieties. Many travelers remain cautious about their spending amid concerns about the economy and stagnant income growth. The result has been a shift in behavior, with tourists opting for shorter, more budget-conscious trips and avoiding high-end or luxury options.
“Tourism industry professionals never look at the statistics because they don’t reflect what we’re experiencing,” Guan explained. “The more you look at it, the more foolish you feel. It’s not adding up.”
While popular tourist destinations in southern China, such as Hainan and the southwestern Yunnan province, continue to attract visitors, consumer spending has not matched pre-pandemic levels. Many hoteliers and travel agents reported lower occupancy rates, with some businesses seeing only a fraction of the traffic they once enjoyed.
“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,” said Cun Xiaoqin, a travel agent and hotel owner in Yunnan province. “Even with increased traffic in the budget segment, it’s not enough to make up for the losses at the higher end.”
Cun, who runs a high-end hotel and offers customized travel packages, said that her business during the summer had fallen by half compared to the previous year. Occupancy rates at her hotel had plummeted by two-thirds, a dramatic drop for a province that has historically been a bellwether for domestic tourism.
For operators like Cun, the changes in consumer behavior have been jarring. As Chinese tourists become more cautious with their spending, many are opting to travel during off-peak times to avoid the crowds and inflated prices that are typical of holidays like the National Day. This shift in preferences is evident in booking patterns, where a spike in demand has been observed after the golden week holiday, rather than during it.
“Overall, bookings after the holiday period are much better than last year – almost double,” Cun noted. “More tourists doesn’t necessarily mean more profits for us travel agencies. It’s about adapting to these market changes, and that’s been difficult.”
The Chinese government has made efforts to revive the tourism sector, implementing policies aimed at boosting consumer confidence and encouraging spending. However, the overall trend of cutbacks persists, with many people becoming more frugal in the face of an economic downturn.
“Many people I know are saying they can’t make it until the Spring Festival,” added Guan of Dear Voyage, referring to the Lunar New Year holiday, which usually takes place in January and February. “There are countless guest houses in Xinjiang and Yunnan that are lining up to be sold.”
While some regions of China, such as Guizhou, Xinjiang, and the northwestern provinces of Gansu, Shaanxi, and Qinghai, saw good visitor numbers over the summer, this increase in foot traffic didn’t translate into the kind of profits that operators were hoping for. The issue, according to Zhang Haoxi, founder of the travel industry publication Travel Zone, lies in the disconnect between visitor numbers and consumer spending.
“The ups and downs felt by the market on the front line starkly contrast with the so-called grand narratives of macroeconomics,” Zhang explained. “The increase in travel volume is masking the deeper problem: tourists are spending less.”
A survey conducted by Zhang among travel agents revealed that even popular destinations like Qinghai experienced only 30% occupancy during the golden week holiday. Such figures highlight the precarious situation many in the industry face. Even with a high number of visitors, low spending and short-stay trips have made it difficult for businesses to cover their operating costs, let alone turn a profit.
During the pandemic, many businesses accepted that the downturn was a force majeure – an unavoidable event outside of their control. But now, with China ostensibly open for business, the challenges facing the tourism sector feel more acute.
“During the pandemic, we could get by because we were operating at minimal cost,” said Guan. “Now we’re running at full cost, and for many in the industry, it’s worse than it was during the pandemic.”
The tourism industry in China now faces an uncertain future, with many businesses unsure whether they can weather the ongoing downturn. The National Day holiday, typically a reliable source of revenue, has instead exposed the fragility of China’s recovery and the deepening economic anxieties among the public.
While official data points to an increase in travel, the reality on the ground paints a more troubling picture. With the Spring Festival and chun yun travel period – a 40-day stretch of intensive travel around Lunar New Year – on the horizon, there is hope that the tourism sector will experience a resurgence. But many industry insiders remain skeptical.
“I don’t think it can get any harder than this,” Guan concluded. “Right now, it’s tough – extremely tough. We’re just hoping things get better next year.”
As China navigates the road to economic recovery, the challenges facing its tourism sector serve as a stark reminder that appearances can be deceiving. The record number of travelers and tourists may suggest prosperity, but the harsh reality is that many businesses are still struggling to stay afloat in the wake of the pandemic and an ongoing economic downturn.
