China’s holiday tourism revenue is 39.2% of pre-pandemic level
Shanghai and other parts of China remained in lockdown or under travel restrictions over a long holiday weekend in early April, sending an official tally of tourism revenue plunging to just over a third of what was before the pandemic.
Hector Retamal | AFP | Getty Images
BEIJING — As mainland China grapples with its worst Covid-19 outbreak in two years, a measure of consumer spending has fallen to levels not seen since the initial shock of the pandemic.
Travel restrictions and neighborhood or city closures discouraged people from traveling during a public holiday that officially ran from Sunday to Tuesday.
And tourism spending by those who ventured out recovered just over a third, or 39.2%, of the level seen during the holidays in 2019, according to the Ministry of Culture and Tourism.
That’s a much 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, the number of Covid cases with symptoms in mainland China has exceeded 1,000 a day and affected regions across the country. The number of asymptomatic cases is much higher.
Shanghai, the country’s largest city, is one of the hardest hit by China’s wave of the highly transmissible variant of omicron. The metropolis was supposed to end a two-part lockdown on Tuesday, but earlier this week gave no indication of when the restrictions would be lifted.
A total of about 193 million people in the country are living in full or partial lockdown, in areas that account for about 22 percent of China’s GDP, Nomura’s chief China economist Ting Lu estimated in a report on Tuesday. .
“Markets could be underestimating the economic damage,” he said. “China [zero-Covid strategy] can save many lives, especially in the elderly, but it also comes at a substantial economic cost and causes collateral damage to people who cannot get normal medical treatment for illnesses other than Covid.
“Unlike spring 2020, when it was widely believed 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,” he said. said Lu.
The number of Covid cases and deaths in mainland China remains lower than other major countries. Large factories across the country have been able to maintain production by keeping staff on site, with economists expecting service industries to remain hardest hit.
Shanghai Disney Resort, which has been closed for more than two weeks, announced on Wednesday that its theme parks and hotels remain closed until further notice.
Tourism revenue for the last long weekend fell 30.9 percent from the same period last year to 18.78 billion yuan ($2.93 billion), the ministry said. Tourist trips fell 26.2% from the same period last year to 75.4 million, or 68% of the pre-pandemic level, the data showed.
People who were able to travel during the holidays mostly booked trips to nearby scenic spots or the countryside, according to booking site Trip.com.
In a country where online shopping is prevalent, Covid has also weighed on parcel delivery.
The number of parcels received and delivered during the holidays each fell about 13% from a year ago, according to the National Post Office. It was not immediately clear whether logistical issues or consumer demand were the primary reason for the decline.
Services business optimism plummets
Caixin’s Services Purchasing Managers’ Index (PMI), a measure of market conditions, showed on Wednesday that business activity in the sector contracted in March at the fastest pace in two years.
“Companies frequently mentioned that tighter virus containment measures disrupted operations and weighed on customer demand in March,” Caixin said in a statement. For a third month in a row, data showed service companies were reluctant to hire more staff.
Service companies generally remained optimistic about growth over the next 12 months. But the statement said the level of optimism fell to its lowest since the second half of 2020 “amid concerns about how long business operations would be affected by the pandemic and the war in Ukraine”.