In the next five years, so-called tier-three and tier-four cities’ pace of consumption growth will surpass that of tier-one and tier-two cities, Xin Chen, China tourism analyst at UBS Securities, said in an interview Tuesday with CNBC.
Chinese cities are divided into tiers, with Beijing and Shanghai falling into the “tier one” category. Although a lower-tier city can still be relatively large by Western standards, increased interest in tourism from those areas indicates that local economies are still faring well.
Chen attributed the greater increase in spending power to this year’s Chinese tax reform — which raised the minimum on monthly taxable income — and improved living conditions that give locals more ability to spend on leisure activities.
This past Sunday marked the end of seven days of vacation to commemorate the founding of the People’s Republic of China on Oct. 1, 1949. Also known as the “Golden Week,” the “National Day” holiday is a popular time for Chinese to travel, since personal vacation days can be limited and the only other long holiday, the Spring Festival, is traditionally reserved for visiting family. As a result, Golden Week is notorious for hordes of visitors to popular tourist sites — more than 140,000 gathered in Beijing’s Tiananmen Square to watch the flag raising ceremony on Oct. 1.
Chinese tourist sites received 726 million visitors during the Golden Week holiday, and domestic tourism revenue increased to 599.08 billion yuan ($86.66 billion), the Ministry of Culture and Tourism said Sunday. Although the 9.43 percent and 9.04 percent respective increases from last year marked a slower pace than in 2017, last year’s holiday also coincided with the Mid-Autumn Festival, which likely contributed to higher figures overall.
Notably, the number of travelers from six smaller Chinese cities more than tripled during this year’s Golden Week holiday, according to data from Ctrip, a Chinese travel services company. The report, released Monday, looked at bookings through the company for tour groups and individual travel.
Leading the growth was the southeastern city of Changzhou with an increase of 288 percent in residents traveling, followed by the southern city of Foshan at 244 percent, and Zhuhai — which borders Macau — at 237 percent. Other cities which saw triple the number of residents booking through Ctrip were the southeastern city of Wuxi and Zhengzhou in the east central part of China.
Chongqing in the central west saw bookings by residents increase by 225 percent, putting the region into fourth place overall, behind Shanghai, Beijing and Chengdu by number of residents traveling, Ctrip data showed.
Spending by Chinese from Dalian, Suzhou, Shenyang, Chengdu, Fuzhou, Zhengzhou, Xian and Xiamen ranged from about 6,800 yuan to 7,800 yuan per person ($982 to $1,127), a “clear” increase from last year’s Golden Week, Ctrip said.
Alipay, a leading mobile payments app run by Alibaba-affiliate Ant Financial, reported more than double the number of overseas in-store transactions, with average spend rising 30 percent to 1,979 yuan ($286). Average spending by user was highest in Denmark at 8,764 yuan ($1,266), Alipay said.
Overall, Thailand was the most popular overseas destination for Chinese during this year’s Golden Week, followed by Japan, the Ctrip data showed. The United States, Russia, Italy and Turkey also ranked among the 20 most popular countries.
Ctrip noted that Chinese tourists are also no longer interested in just shopping. Museum ticket bookings through one of Ctrip’s platforms doubled, with Spain‘s Prado Art museum the most popular, and New York‘s Metropolitan Museum of Art ranking fifth.
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