China's holiday travel: Rail and car usage surges on budget-conscious consumer trend

China's travel boom: During the onset of a major public holiday in China, travel via rail and car experienced a significant surge, reflecting consumers' continued emphasis on budget-conscious choices amidst economic challenges.

Ahead of the five-day holiday that commenced with May Day, domestic flight prices were observed to decrease, with projections indicating a preference for road trips over air travel, either through early bookings or opting for driving.

Travel spending stagnates

Although travel activities have rebounded following the relaxation of COVID restrictions in 2022, consumer expenditure during these trips has not witnessed a proportional increase, thereby limiting the anticipated economic stimulus.

With China targeting an economic growth rate of approximately 5 per cent for 2024, analysts foresee difficulties in achieving this goal without substantial stimulus measures.

Recent official surveys indicated a slowdown in both manufacturing and services activities in April, underscoring a potential loss of momentum in the economy.

Individuals like Lin Yu, visiting Beijing from Hangzhou, acknowledged the financial pressures, which vary depending on family circumstances and industry affiliations.

China flight discounts

Flight prices in China experienced a notable decline of 38 per cent by the fourth week of April compared to earlier in the month, indicating early bookings in a fiercely competitive aviation market.

State media reported a projected daily presence of 58 million cars on roads during the holiday period, alongside more than 20 million railway passengers on the first day alone.

First-quarter statistics revealed a nearly 17 per cent increase in the number of trips compared to the previous year, according to state broadcaster CCTV.

During a three-day holiday in April, average spending per trip exceeded 2019 levels for the first time, registering a marginal increase of just over 1 per cent.

Yum China's expansion

Some businesses have adjusted their strategies to cater to cost-conscious consumers during travel. Yum China, which operates KFC in the country, announced plans to open 30 per cent of its new stores in new cities or roadside locations such as highway rest stops.

Yum China CEO Joey Wat noted a 20 per cent rise in same-store sales at these locations during the Lunar New Year holiday in February, emphasising their importance in capitalising on holiday travel surges.

(With Reuters Inputs)