HONG KONG – Starting Sunday, China’s 1.4 billion-strong population will go on a week-long hiatus as the country celebrates its National Day. While years past may have been a bit sour for stores, this year’s Golden Week vacation looks set to put retailers in a celebratory mood as well.
According to the China Tourism Academy, China is expecting a 10 percent year-on-year growth in tourist numbers, and a 12 percent year-over-year increase in receipts to 590 billion renminbi, or $89 billion, during the 2017 Golden Week holiday.
The holiday also coincides with the Mid-Autumn Festival this year, extending it by a day until Oct. 8, and for retailers, gaining an additional weekend day is likely to bode well.
“Golden Week is a positive one for retail-related outbound travel because it’s not a family holiday,” said Hunter Williams, a partner at consultancy Oliver Wyman. “It tends to be more about travel and spending. It’s not like Chinese New Year and other holidays where people head home. It ends up being a ‘for me’ holiday.”
According to a recent study by the firm, the average Chinese tourist spent about 6,705 renminbi, or $986, on shopping, representing about a third of a trip’s expenditure.
“In addition to a favorable macro backdrop, we continue to witness a structural repatriation trend of Chinese luxury purchases supported by normalized regional price gaps,” RBC Capital Markets analyst Rogerio Fujimori said. “This has been exacerbated of late by recent euro strengthening and terrorist attacks in Europe as well as China’s ban on package tours to South Korea.”
China’s largest online travel agency Ctrip estimates 650 million Chinese will travel in the country during Golden Week, and six million are expected to go abroad.
Domestically, the provinces of Hainan and Yunnan, in addition to Beijing, are the top destinations. More people are booking longer trips, defined as more than four days, Ctrip said, and about 38 percent of travelers will spend more than seven days on their trip.
Thailand, Japan, the U.S., Singapore and Australia were the top five international destinations for this holiday, based on Ctrip bookings.
Mavis Hui, DBS Vickers’ greater China consumer analyst, said Hong Kong “should stand among the more popular places for Chinese tourists, especially given a weak Hong Kong dollar (RMB:HKD exchange rate up 6 percent year to date).”
“Overall shopping receipts should also see firm growth as Chinese consumer confidence continues to hold up well this year,” Hui added.
Despite the devastation brought on by typhoons last month, Golden Week should be the busiest holiday period Macau has seen in four years, Deutsche Bank analyst Karen Tang said.
“To gauge the strength of this holiday’s demand, we checked online bookings for 18 hotels in Macau yesterday,” Tang wrote. “Of the 18 hotels we checked, 11 hotels are already fully booked for the first five days of Golden Week, up from eight hotels this time last year.”
Credit Suisse concurred. “From our discussion with industry participants, the advanced booking is strong and they expect the peak traffic to last from Oct. 1 to 8 this year compared to Oct. 1 to 6 in 2016,” it said in a report last week.