During this year’s Lunar New Year (LNY) holidays, China experienced an unprecedented surge in population migration, setting new records across road, rail, and air travel. The two weeks leading up to the LNY witnessed a remarkable increase in total passenger traffic, surpassing previous years’ figures. The day before the Lunar New Year saw a particularly notable spike, maintaining a consistently elevated level, approximately 20-25% higher than previous years, throughout the 7-day holiday period.
It’s worth noting that the comparison excludes the years 2020-2022 due to the disruptions caused by the Covid pandemic.
This surge in travel marked a significant improvement from the National Day holiday in October 2023 when passenger traffic was still 25% below pre-Covid levels. The trend extended to domestic flights, which saw a further increase since the beginning of 2024.
Chinese consumers embraced tourism during the LNY holidays, reflecting a shifting pattern where people are increasingly opting for travel overstaying at home.
Tourism attractions welcomed a staggering 474 million visitors, generating a total revenue of CNY 633 billion.
These figures exceeded pre-Covid 2019 levels by 13% and 23%, respectively. This positive trend showcased a substantial improvement from the October 2023 holidays when visitors and revenues only experienced single-digit growth compared to 2019 levels.
The average spending per person during the LNY was 9% higher than in 2019, mirroring the increase seen in the October 2023 holidays. Furthermore, movie ticket sales hit a record high in 2024, surpassing the previous peak in 2021.
Cross-border travel also witnessed a significant recovery, with Macau emerging as the hottest destination for Chinese cross-border travellers.
The number of mainland visitors in Macau during the LNY reportedly matched 2019 levels, boasting a hotel occupancy rate of 95%. Hong Kong also experienced a surge in daily mainland visitors, surpassing any recorded day in 2023.
Although the total number of visitors during LNY in Hong Kong was reportedly on par with 2018 levels, it remained lower than the peak in 2019, with a hotel occupancy rate around 90%. Meanwhile, the total number of international flights reached approximately 70% of 2019 levels, indicating that the number of visitors to other countries likely lagged those visiting Hong Kong and Macau.
Considering the significant economic activities and spending associated with this surge in travel and tourism, it could potentially have implications for China’s currency. The increased consumer spending, both domestically and internationally, may contribute to a stronger demand for the Chinese currency in the global market.
Additionally, the positive economic indicators resulting from the LNY festivities could bolster investor confidence in China’s economy, further influencing the strength of its currency. However, it’s crucial to monitor various factors, including global economic conditions and geopolitical events, to assess the comprehensive impact on China’s currency in the coming months.
Market commentary and analysis from Luca Santos, currency analyst at ACY Securities
