China’s domestic tourism — a key indicator of retail spending — is poised to return after hitting an all-time low during the country’s worst lockdowns, official data and analysts show.

Since the mainland’s biggest lockdown in Shanghai ended in late May, rising holiday bookings have signaled tourism spending will pick up in the second half, Fitch Ratings said.

The momentum comes after China’s tourism revenue and numbers hit a low in the first half of 2022 and fell nearly half from the same period in 2019 before the pandemic hit, Fitch added.

“China’s relaxed travel restrictions related to the Covid-19 pandemic and more targeted pandemic control measures have fueled an increase in tourism demand, despite ongoing scattered outbreaks,” Flora Zhu and Jenny said. Huang, China-based Fitch Ratings analysts, in a note late last week.

“A slow recovery in the tourism sector has dampened the economy given its large contribution, accounting for around 11% of GDP and 10% of national employment in 2019.”

Tourists walk under cherry blossoms on Jimingsi Road on March 22, 2016 in Nanjing, China’s Jiangsu Province.

CGV

After a series of relaxations by Beijing – including easing inter-provincial group travel bans and reducing excessive local government mobility controls in June – the number of travelers jumped more than 62% from a month-on-month in July, Fitch Ratings said, citing official Chinese data.

Data from online travel agencies such as Tuniu Corporation showed bookings up 112% from July, Fitch said.

The average daily number of tourists at Xinjiang’s top-rated tourist attractions, or “5A level”, soared to 110,000 in July from 19,000 in May, Fitch analysts said. Dali City in Yunnan, a famous tourist spot, attracted 6.9 million tourists, a 46 percent jump from pre-pandemic levels in 2019, they said.

Recent epidemics in Hainan, Xinjiang and Tibet are not expected to dampen the recovery of tourism as there are fewer travelers to these areas than to the rest of the country, according to the Fitch report.

But the recovery, while robust, remains uneven across regions, especially short-haul travel operators will do better than domestic scenic spot tourism businesses that target domestic visitors, he added. .

Chinese consumers will continue to favor local and shorter trips amid the pandemic, according to the report.

The pandemic has also altered China’s domestic tourism, business advisory firm China Briefing said in a note last week.

Group travel destinations have lost some popularity as Chinese travelers shift to family vacations, healthcare visits and research trips, he said.

CTrip, China’s leading online travel agent, said in its summer tourism report last month that “parent-child” or family trips, as opposed to large traditional Chinese bus tours, had increased.

Signs of recovery have emerged in Chinese retail spending, including tourism.

New data on Monday shows July retail spending rose 2.7% year-on-year after an unexpected 3.1% rise in June, although the latest July result fell short of expectations. analysts of an increase of between 4% and 5%.

These were the first increases in retail spending since February as consumption picked up after Covid-19 infections and the easing of restrictions.

In May, as Shanghai battled its worst lockdown, retail sales fell 6.7% year-on-year.