The Reverse of Fortunes: The Covid-Adjusted Tale of Chinese New Year Spending

China is known for many things. It is the second-largest economy in the world, its tea is a worldwide standard for good quality, and even children whose native language is not English can recognize the phrase “Made in China” since the age of three when the curiosity about what is written on their toys takes lead. The one thing people do not always know is that this country is also home to the largest annual domestic migration on the planet, which normally occurs during the seven-day Lunar Chinese New Year holiday. This time, however, the pandemic has introduced its amendments.

According to the commerce ministry, some 48 million more people were expected to stay behind in 36 major cities instead of traveling back home to see their relatives, compared to the pre-pandemic numbers. Such a trend resulted in two major outcomes: the travel industry as a whole received yet another blow, while cinemas and energy suppliers thrived amid the heightened demand.


Perhaps, the largest hit was received by the transportation industry: the data showed a staggering 70% drop in the number of passenger trips across the country in a couple of weeks leading up to Chinese New Year, while a travel index published by Baidu showed a 41% fall in travelers. Airlines were out of luck as well – flight bookings for a fortnight before the holiday stood at a meager 32.8% of the respective period in 2019, with tickets issued during the holiday period sinking even lower, to 14.7%.

Nevertheless, not everybody was upset with the current state of affairs. Restaurants and luxury hotels (especially those quick enough to adapt to a change in the demand structure) in large cities have become unlikely profiteers, benefitting from the cash wealthy Chinese consumers would normally spend abroad while traveling. Beyond the hospitality industry, cinemas recorded an increase in ticket sales with revenues reaching up to 1.463 billion yuan, just beating the 1.458-billion-yuan mark recorded in 2019, according to data from Dengta.


Overall, while the pandemic has certainly introduced its negative adjustments, some of the businesses have possibly benefitted from such a reverse of fortunes, making a good case for believing in multiple doors opening while others being closed. As to the hospitality industry specifically, the past year has shown the concerned stakeholders that the rules of the game would probably change for good, and so, now may be the right time to revise our playbooks.


#ChineseNewYear #marketanalysis #hospitalitymarket

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