China’s long weekend tourism spend plunges to 39.2% of pre-pandemic levels

China’s long weekend tourism spend plunges to 39.2% of pre-pandemic levels


Shanghai and other parts of China remained in lockdown or subject to travel restrictions during a long holiday weekend in early April, sending an official count of tourism revenue plunging to just over a third of what it was prior to the pandemic.

Hector Retamal | Afp | Getty Images

BEIJING — As mainland China tackles its worst Covid-19 outbreak in two years, a measure of consumer spending has dropped to levels not seen since the initial shock of the pandemic.

Travel restrictions and lockdowns of districts or cities discouraged people from traveling over a holiday that officially ran from Sunday to Tuesday.

And tourism spending by those who did venture out only recovered just over a third, or 39.2%, of the level seen during the holiday in 2019, according to the Ministry of Culture and Tourism.

That’s a far slower pace than during the Lunar New Year holiday earlier in the year, when tourism spending was 56.3% of what it was in 2019.

For more than three weeks, mainland China’s count of Covid cases with symptoms has topped 1,000 a day and touched regions across the country. The number of asymptomatic cases is far higher.

Shanghai, the country’s largest city, is one of the hardest hit in China’s wave of the highly transmissible omicron variant. The metropolis was supposed to end a two-part lockdown Tuesday, but earlier this week gave no indication of when restrictions would lift.

Markets could underestimate the economic damage [from Covid].

Ting Lu

chief China economist, Nomura

In all, about 193 million people in the country are living in full or partial lockdowns, in regions that account for about 22% of China’s GDP, Nomura’s chief China economist Ting Lu estimated in a report Tuesday.

“Markets could underestimate the economic damage,” he said. “China’s [zero-Covid strategy] may save many lives, especially among the elderly, but it also incurs a substantial economic cost and causes collateral damage to people who are unable to obtain normal medical treatment for illnesses other than Covid.”

“Unlike in spring 2020, when there was a general belief that Covid-19 would end in the summer, we currently see no end in sight; this has increased uncertainty, which is quite negative for investment,” Lu said.

The number of cases and deaths from Covid in mainland China remains below that of other major countries. Large factories in the country have been able to maintain production by keeping staff on site, with economists expecting services industries to remain the most affected.

Shanghai Disney Resort, which has been closed for more than two weeks, said Wednesday its theme parks and hotels remain closed until further notice.

Tourism revenue for the latest long weekend holiday dropped by 30.9% from the same period last year to 18.78 billion yuan ($2.93 billion), the ministry said. Tourist trips fell by 26.2% from the same period last year to 75.4 million, or 68% of the level prior to the pandemic, according to the data.

People who were able to travel over the holiday mostly booked trips to scenic spots nearby or in the countryside, according to booking site Trip.com.

In a country where online shopping is prevalent, Covid also took a toll on package delivery.

The number of packages received and delivered during the holiday each fell by about 13% from a year ago, according to the State Post Bureau. It was not immediately clear whether logistics snags or consumer demand was the primary reason for the decline.

Services companies’ optimism drops

The Caixin services Purchasing Managers’ Index (PMI), a measure of market conditions, showed Wednesday that business activity in the sector contracted in March by the sharpest pace in two years.

“Businesses frequently mentioned that tighter virus containment measures had disrupted operations and weighed on client demand in March,” Caixin said in a release. For a third straight month, the data showed services companies were reluctant to hire more staff.

Services businesses generally remained optimistic about growth over the next 12 months. But the release said the degree of optimism fell to its lowest since the second half of 2020 “amid concerns over how long business operations would be impacted by the pandemic, and the war in Ukraine.”

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