China’s consumption is terrible! National Day holiday travel spending "lowest in 4 years", movie box office plummets 36%

During China's seven-day Golden Week holiday this year, the average expenditure per domestic trip by Chinese tourists dropped to "It has failed to drive consumption recovery in four years. Instead, there has been a phenomenon of "people go out, but spend less money." "Reuters" reported that during China's seven-day Golden Week holiday this year, the average expenditure per domestic trip by Chinese tourists fell to "the lowest in four years" and movie box office also hit a 12-year low, reflecting the sluggish housing market, slow wage growth and uncertain employment prospects that continue to suppress consumer confidence.

The report pointed out that based on data released by the Chinese government, the average domestic travel expenditure during this year’s National Day Golden Week was 893.92 yuan (approximately NT$4,233), down 1.9% from 911.04 yuan (approximately NT$4,314) in the same period last year, setting a record low since 2022. In 2022, China is still under a strict COVID-19 epidemic, and the average expenditure per trip is only 680.60 yuan (approximately NT$3,223).

The National Day holiday is one of the most important long holidays in China, and each trip’s travel expenditure is also regarded as an important indicator of consumer confidence. China's consumption has been weak in recent years. The long-term sluggish real estate market, slow wage growth and sluggish job market have all left households unsure about their future income.

Ailsa Liao, a senior analyst at Forthright Securities, pointed out that Chinese consumers "have a strong willingness to consume, but lack confidence." The problem is not that people don't want to consume, but that they are uncertain about their income and employment prospects.

Sienna Parulis-Cook, director of marketing and communications at Dragon Trail International, an international travel marketing company, said that the demand for outbound travel among Chinese tourists has increased significantly this year. The company's August survey showed that 54% of respondents planned to travel abroad during the holidays, up from 35% in the same period last year.

However, travelers still attach great importance to price. In the survey, only 5% of the respondents planned to stay in luxury hotels, while mid-priced accommodation was the most popular, accounting for 33%. Analysts from Founder Securities also pointed out that Chinese consumers are willing to travel further afield, but are still very cautious about spending money.

In addition to falling tourism spending, the film market is also showing weakness. The National Day Golden Week is usually an important period for the Chinese film industry, tied with the Lunar New Year as the main box office peak season throughout the year. However, this year’s Golden Week movie box office revenue was only 1.16 billion yuan (approximately NT$5.5 billion), a 36.6% drop from the same period last year, setting a record low since 2014.

Citibank analysts pointed out that the box office performance in the first four days of this year's holiday was even worse than during the COVID-19 epidemic. The main reasons include the lack of blockbuster movies and the fact that many people choose to travel instead of going to movie theaters.

The contrast between travel demand and movie box office also highlights the difficulties faced by China's consumption recovery: people are still willing to arrange travel, but they have not fully increased all types of consumer spending. When income and employment prospects are uncertain, consumers are more likely to spend money on items they value, and save on other expenditures when they can.

Overall, China’s National Day Golden Week this year showed different trends, with an increase in outbound tourism, a decline in domestic single-trip travel expenditure, and a sharp shrinkage in movie box office. This shows that the Chinese consumer market is not completely devoid of demand, but that there is still a gap between consumption willingness and consumer confidence. If the sluggish housing market, slow wage growth, and uncertain employment prospects persist, it may still be difficult to drive a broader consumption recovery based solely on holiday crowds.