Rail and car travel across China surged on Wednesday, the first day of a major public holiday, as consumers remained focused on keeping spending in a challenging economy.
In the run-up to the five-day holiday that began with May Day, domestic airline fares were down and forecasts suggested that more travelers chose to drive instead of fly, or had booked earlier to save.
Travel of all types has rebounded since China lifted strict COVID control measures in late 2022, but consumer spending on those trips has failed to keep up, limiting the boost to the economy wider.
China has set an economic growth target for 2024 of around 5%, which many analysts say will be a challenge to achieve without much more stimulus.
China’s manufacturing and service activity expanded at a slower pace in April, official surveys showed on Tuesday, suggesting some loss of momentum.
“There is really significant pressure,” said Lin Yu, 38, who was visiting Beijing from Hangzhou. “Every family’s situation is different, and clearly it also depends on the industry you work in.”
As of the fourth week of April, the average price for an economy flight in China had fallen 38% from the first week of the month to the equivalent of just under $97, according to VariFlight, a data service provider of aviation.
“Chinese airlines have to adapt to these changes,” said VariFlight’s Zheng Hongfeng, who said the drop in prices showed travelers were booking early in a highly competitive market.
Some 58 million cars are expected to be on the roads each day during the holiday, while railways carried more than 20 million passengers on Wednesday alone, state media said.
The number of trips made during the first quarter rose by nearly 17 percent from a year earlier, according to state broadcaster CCTV.
A three-day public holiday in April was the first time average spending per trip rose beyond 2019 levels. By this measure, spending was then just over 1%.
Some companies have changed to try to appeal to consumers who watch their spending while looking down the road.
Yum China, KFC’s operator in China, said this week that 30% of its new stores will be in lower-tier cities or roadside locations such as highway rest stops.
Same-store sales at these locations rose 20% year-over-year in February, Yum China CEO Joey Wat said.
“They are key to capturing the peak travel volume during the holidays,” he said.
Reuters
