Resilient Travel Trend During Labor Day Holiday
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Citi characterizes China's 2026 Labor Day holiday travel trends as moderate but resilient, noting that shifting school spring breaks, higher airfares, and inclement weather in southern China temporarily dampened growth figures without materially damaging underlying travel intent. Over the five-day holiday, domestic tourist trips reached 325 million, a 3.6% year-on-year increase, while domestic tourism revenue totaled 185.5 billion RMB, growing 2.9%. Although this represents a deceleration from the Tomb-Sweeping and Spring Festival holidays, per capita spending slipped only 0.7% to 571 RMB, suggesting rational consumption patterns remain intact. Transportation data highlighted a clear modal shift driven by price sensitivity. Total passenger throughput rose 3.49%, with railway and road travel increasing 4.6% and 3.51%, respectively, fully offsetting a 5.74% decline in air travel caused by average economy ticket prices surging 9.7%. Citi maintains that consumers are still willing to travel but are pivoting toward more economical transit options. Cross-border traffic saw modest gains, supported by a 12.5% increase in foreign arrivals under visa-free policies. Conversely, Hainan duty-free sales growth normalized to 10.4%, slightly below expectations. Within the hospitality sector, Citi favors ATAT and H World Group, citing their strong mid-to-high-end market positioning and operational resilience, which should allow these leading hotel chains to outperform peers through average daily room rate stability.
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