By Katrina Hamlin
HONG KONG- Investors panning for consumption bright spots in the world’s second-largest economy will find a bit of good news from this year’s Golden Week. Average daily cross-border travel is forecast to rise 19 percent from last year, above pre-Covid volumes, per official estimates. Gamblers have also returned to Macau. More middle-class spending will stir hopes that Beijing’s stimulus might gain traction.
Wealthier travelers were definitely on the move. On the very first day of China’s week-long holiday celebrating the founding of the People’s Republic, trips abroad rose 40 percent from last year, HSBC research noted. Long-haul flights topped pre-pandemic levels, online travel agency Trip.com’s 9961.HKadvanced bookings showed, including a 30 percent spike in European travel. International travelers spent 120 percent more using accounts enabled through an international card, according to mobile-wallet service Alipay
Meanwhile, in Macau the numbers of visitors from the mainland rose 6 percent from 2019 levels during the first three days of the break, per CLSA. Total wagers in the so-called premium mass segment – the higher-end of the mass market – hit a record high even though bets per person were slightly down, according to a Citi survey, thanks to the overall volume of guests.
These early trends indicate China’s middle class may be more willing to loosen their purse strings than previously thought. Amid slowing growth and a property downturn, domestic demand has remained anaemic for much of the year: retail sales rose only 2.1 percent in August, missing analyst forecasts of 2.5 percent. Indeed, in Hong Kong, once a popular destination for mainland shoppers, the city’s Retail Management Association said the number of visitors from across the border during Golden Week was “like a normal weekend”. The mainland box office, another closely-watched indicator during the holiday, was slower than last year, with ticket sales hitting the 1 billion yuan ($143 million) mark a day later than in 2023.
The mixed data suggests that consumption may be perking up in certain pockets of the population. Spending habits are also changing, as travelers eschew splurging on material goods in favor of experiences, Alipay suggested.
Still, Beijing will be grateful for even a partial revival. Right before the holidays, officials unveiled a sweeping package of monetary and property easing measures, and signaled more to come. Hopes of a significant fiscal spending have fueled a 25 percent rally in Hong Kong’s benchmark index. Signs that China’s consumers are regaining some confidence will help add to the momentum.
Outbound travel rose around 40 percent year-on-year on Oct. 1, the first day of a week-long public holiday to mark China’s National Day, according to online bookings agency Trip.com data cited in an HSBC research note. – Reuters
