China’s hotel operators relish National Day windfall on pent-up holiday demand

China’s National Day holiday, known as the Golden Week peak season, runs from September 28 to October 6, freezing the local financial markets and bringing most economic activity to a standstill.

“A business boom during the National Day holiday is a certainty,” said Andrew Xu, co-president of Fosun Tourism Group, who is also the CEO of its resort business Club Med. Tourists will rush to reserve air tickets and hotel rooms in early September, and “room booking is already strong and prices will be raised,” he added.

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Thousands of visitors flock to Huangshan on Chinese National Day

Thousands of visitors flock to Huangshan on Chinese National Day

“Businesses will be busier than during the Labour Day holiday [in May] because pent-up travel demand will be unleashed over the longer [National Day] holiday,” he said.

Fosun Tourism is the Hong Kong-listed leisure business unit of Fosun International controlled by mainland Chinese billionaire Guo Guangchang. Its assets include Club Med, which operates all-inclusive holiday resorts worldwide.

Revenue generated over the May 1-3 holiday this year jumped by eight-fold over the same Labour Day holiday in 2022, when pandemic curbs were still ravaging China’s economy, and more than doubled the receipts in 2019, before the coronavirus outbreak.

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“Long holidays, when parents are able to travel to places of interest and scenic spots with their kids, give hotel, restaurant, and airline operators the opportunity to make a killing,” said Ivan Li, fund manager at Loyal Wealth Management in Shanghai. “Prices can be unreasonably high in some cases.”

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China set to open its borders to foreign tourists for the first time since Covid-19 pandemic

China set to open its borders to foreign tourists for the first time since Covid-19 pandemic

After the Covid-19 was downgraded by the World Health Organization, travel operators will look back at Beijing’s decision to live with the virus as a major turning point for the industry.

Fosun Tourism earned 472 million yuan (US$65 million) of profit in the first half of this year, compared to a loss of 197 million yuan in the same period a year earlier. Revenue climbed 29 per cent to 9.5 billion yuan as it filled more rooms at resorts and hotels in mainland China.

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The company is not alone, as 15 of the 19 tourism-related companies listed in onshore stock exchanges also made a turnaround in their latest interim reports for this year through June 30.

Lijiang Yulong Tourism posted a net profit of 121 million yuan versus a loss of 48 million yuan a year ago. Xi’an Qujiang Cultural Tourism posted a net profit of 12.9 million yuan, compared with a 85.1 million yuan loss a year earlier.

In Shanghai, total spending on hotels and dining out soared by 42 per cent to 19.4 billion yuan (HK$20.82 ­billion) in the first half of 2023, outpacing the city’s 9.7 per cent growth in gross domestic product, according to official statistics.