'Consumption boom': Domestic travel surges in China during Lunar New Year

People across China celebrated big during the Lunar New Year last month, with holiday travel and consumer spending surpassing pre-pandemic levels, according to government figures.

During the eight-day festival in mid-February, China experienced an estimated 474 million domestic travel trips, the country's Ministry of Culture and Tourism reported. The number of trips marked an over 34% increase from the year prior and a 19% jump from 2019.

“During this past Chinese New Year, domestic and international travel for Chinese tourists grew significantly,” Trip.com Group, the travel service conglomerate, said in a statement. “Domestically, the popularity of ice and snow travel in the north, and hot spring and island travel in the south led to a surge in interprovincial trips.”

People also spent heavily as they gathered to celebrate the Lunar New Year, also known as the Spring Festival. According to government figures, domestic tourists spent over 632 billion yuan (roughly $88 billion), an increase of 7.7% compared to holiday spending in 2019 and a 47.3% year-over-year hike.

“China's Spring Festival holiday has ignited a new round of consumption boom,” China’s state-run Xinhua news agency stated. “After a lapse of four years, the Chinese Spring Festival once again became the peak of global travel consumption.”

Consumer spending and domestic travel during the annual Lunar New Year is seen as an indicator of economic trends in China. Economists warn, however, that this year’s high level of consumption does not necessarily indicate an economic revival.

“Recent figures indicate that China’s consumption has finally picked up, but they are not strong enough to warrant an economic recovery led by the private sector this year,” said Seisaku Kameda, the Executive Economist at the Sompo Institute Plus, the internal think tank of the Sompo Group.

This year’s surge in domestic travel and spending comes as China continues to grapple with sluggish growth and an uneven economic recovery from the pandemic. “Consumer sentiment is mildly recovering,” Kameda added. “We, however, should not overestimate these developments.”

In January, the World Economic Forum’s Chief Economists Outlook found that China was an exception to the buoyant economic activity expected across Asia, with a “previous combination of strong and moderate growth expectations being replaced with largely moderate (69%) expectations for 2024.”

In its report, China’s Ministry of Culture and Tourism added that a record 163 million people spent over 8 billion yuan ($1.1 billion) at cinemas across the country during the Lunar New Year. The movie-going figures marked an over 18% and 26% increase, respectively, compared to the year prior.

Moreover, roughly 16,300 commercial performances were held during the festival week, an over 50% increase from 2023.

“Consumption for Chinese tourists, both domestically and abroad, has also increased, but new spending patterns have arisen,” Trip.com Group added in its statement. “Chinese tourists today are willing to spend more to enhance their travel experience, whether it’s visiting unique attractions or enjoying highly customised service.”

Trip.com Group also noted a recent surge in interest in traditional Chinese cultural events such as lantern festivals and dragon dance performances and a sharp increase in customised travel orders.