China's Lunar New Year holiday revenue beats pre-Covid levels

Tourism revenues in China during the eight-day Lunar New Year holidays that ended on Saturday surged by 47.3 percent year-on-year thanks to a domestic travel boom, surpassing pre-Covid 2019 levels, official data showed.

The data may offer temporary relief to policymakers as the world's second-largest economy has been facing deflationary risks amid weak consumer demand, but the sustainability of the tourism boost remains uncertain.

During the holiday, known as the world's largest annual migration, tourist attractions across the country witnessed massive crowds.

Domestic tourism spending jumped by 47.3 percent to 632.7 billion yuan ($87.96 billion) from the same holiday period in 2023, and were up 7.7 percent from pre-COVID levels in 2019, according to the data by the Ministry of Culture and Tourism on Sunday.

The number of domestic trips made during this year's holiday grew by 34.3 percent from a year ago, totalling 474 million which also exceeded the pre-pandemic levels of 2019 by 19 percent. The holiday was seven days long in 2019.

Average spending per trip during the holiday this year reached 1,335 yuan, according to Reuters calculations based on the ministry data. This compared to 1,238 yuan per trip in 2019.

Property downturn and sluggish demand

The holiday, also called the Spring Festival, is traditionally the time hundreds of millions of people return to their hometowns by air, train or road to reunion with family members.

For international travels, China witnessed around 13.52 million inbound and outbound trips during the holiday, growing by 2.8 times from the same holiday period last year, according to the National Immigration Administration. The total entry-exit trips during the holiday returned to 90 percent of the 2019 levels, according to the administration.

As film watching becomes one of the most popular entertainment activities during the holiday, the country's box office revenue exceeded 8 billion yuan over the eight days, according to the China Film Administration, marking a new record high.

The economy has been grappling with multiple challenges including a property downturn and sluggish demand since last year, forcing policymakers to cut interest rates to spur growth even as many developed economies were focused on taming stubbornly high inflation.

As authorities are striking a delicate balancing act to support the economy at a time when signs of deflationary pressures call for more stimulus measures, China's central bank left a key policy rate unchanged on Sunday when rolling over maturing medium-term loans.