China reporting Labour Day air travel increase

The Ministry of Culture and Tourism in China reported that during the five-day Labour Day holiday (1-5 May), a total of 295 million domestic trips were made in China, up 7.6% year on year, and 28.2% higher than 2019. Domestic tourists spent a total of RMB167bn ($23.5bn) on travel, up 12.7% year on year, or 13.5% higher than 2019 (all on a like-for-like basis). Fliggy, China’s premier travel agency, echoed this by saying that average per-capita spending was up “19% year on year”. Internationally, the National Immigration Administration noted that China witnessed a total of 4.76 million border entry-exit trips (including travel to Hong Kong and Macau) for mainland citizens during the Labour Day holiday, up 35% year on year. Fliggy reported that bookings for overseas hotel doubled year on year, while booking prices for international hotels and air tickets dropped over 10%. A report from HSBC believes that this “bodes well"" for TCOM and Air China. “We note that TCOM should benefit most from the resilient travel demand. On the one hand, it is able to capture more share in hotel bookings in the domestic China market as people are doing more short-haul travel outside the traditional long holidays. “On the other hand, it enjoys higher take rates in international air ticket bookings than domestic bookings, cushioning downside on declining airfares (Growing at home and abroad, 11 April 2024).” “We note that Air China is also likely to be another key beneficiary among the Big 3 as 1) it is the leader in terms of yields domestically where we would see pax load factor improving due to capacity diversion into international routes and 2) it is China's largest intercontinental route carrier amid expectations of a ramping up of China-US flights.”