Cost-conscious Chinese tourists look to affordable options for Golden Week holiday

By Sophie Yu and Casey Hall

BEIJING/SHANGHAI (Reuters) - Chinese tourists are expected to take longer trips than last year during the Golden Week holiday that kicks off on Tuesday, but that will not necessarily lead to a bump in spending, travel industry experts said.

With the economy slowing and consumer confidence hovering just above historic lows, they expect many travellers over the week-long National Day break will opt for cheaper domestic or short-haul overseas destinations and take advantage of a decline in airfares.

The holiday period has traditionally produced peak numbers of Chinese travelling, especially abroad given the length of the break. This year, the government has forecast the daily average number of trips handled by the nation's transport sector will rise only 0.7% year-on-year.

"It would be a good result if tourism spending remains flat with last year," said Liu Simin, an official with the tourism arm of Beijing-based research institute China Society for Futures Studies. "People are more willing to travel when the economy is good, but when there is no economic growth, there is no tourism growth."

Wang Xin, an office worker in Beijing, said she would drive with family to Yangzhou, a city near Shanghai known for its lakes, gardens and fried rice.

"There is no toll fee during holiday so we'll drive instead of taking the train," the 45-year-old said. "Better not to spend unnecessary money when the economy is like this. Many people are losing jobs and at my age if it happened to me, I wouldn't be able to find another one."

Before the pandemic, her family's Golden Week destinations had included Singapore and the United States.

FALLING AIRFARES

Data from travel platform Flight Master shows domestic air ticket prices are expected to be 21% cheaper than the same period last year, while international economy class airfares will be 25% lower than 2023 and 7% lower than 2019.

It predicts international destinations of choice for outbound travellers will continue to be short-haul Asian hubs, such as Japan, South Korea, Thailand and Singapore.

Trip.com, China's largest online travel agency, also said the top destinations were in Asia, but it had seen a significant shift toward long-haul destinations like Australia, New Zealand, Britain and France this year with longer stays.

"Travellers will likely take advantage of lower ticket prices to travel further, stay longer and upgrade to a higher starred hotel," HSBC analysts said in a note.

While last week's large-scale stimulus may have some impact on spending, it would likely be limited, the analysts said, predicting purchases were likely to meet but not exceed 2023 levels for the holiday period.

Some foreign airlines such as British Airways and Qantas Airways have cut or halted China flights this year amid insufficient demand as well as fierce price competition from local carriers.

AirAsia Philippines this month announced it would stop flights between Manila and China by the fourth quarter, with its CEO quoted in local media saying China's 30% share of its traffic in 2019 had fallen to just 2% this year.

AirAsia did not respond immediately to a request for comment. There are, however, exceptions. Korean Air Lines said regional travel demand was improving and this month announced the launch or re-introduction of several routes to and from China.

(Reporting by Sophie Yu in Beijing and Casey Hall in Shanghai; Editing by Jamie Freed)