China's travel industry is facing significant challenges, with operators reporting a dismal business outlook during the National Day holiday, traditionally a peak travel time. Guan Wenlu, COO of Dear Voyage, noted that current bookings are only 60-65% of last year and half of 2019 levels, despite optimistic travel data indicating 107 million domestic trips during the Mid-Autumn Festival, an increase of 6.3% from 2019, and total tourist spending reaching 51 billion yuan (US$7.26 billion), up 8% from 2019 [38dcc36c].
In a surprising twist, rental car bookings surged over 60% in July and August 2024 compared to the same months in 2023, with remote tourist destinations experiencing an astonishing increase of over 200%. This trend became particularly evident after the Labour Day holiday in May 2024, as travelers sought new experiences and flexibility in their journeys. CAR Inc. reported that over 90% of its vehicles were rented out during May, highlighting the growing demand for car rentals [13873623].
As winter approaches, the Chinese government is focusing on boosting the 'snow and ice economy' to further stimulate tourism and sports. The State Council has issued guidelines aimed at enhancing winter tourism, with Harbin already seeing an early influx of tourists. From November to February, over 87 million visitors are expected to generate 124 billion yuan (US$17.3 billion) in revenue. The winter tourism industry is projected to reach 1.5 trillion yuan by 2030, a 68% increase from 890 billion yuan in 2023 [a9785184].
The demographic of car rental customers is shifting, with 76% of renters born in the 1980s and 1990s, while the fastest-growing segment consists of those born after 2000, who showed a 77% increase in rentals. The average expenditure on car rentals this summer reached 726 yuan, reflecting the willingness of younger generations to invest in travel experiences [13873623].
However, the broader economic context reveals that the ride-hailing sector is facing overcapacity issues. Cities like Jiaxing and Shenzhen are experiencing declining average daily orders and incomes for drivers, as the number of registered ride-hailing drivers has surged to over 7.1 million. The urban unemployment rate in China has also risen to 5.2% in July 2024, adding pressure to those reliant on driving jobs [0d346f87].
While the increase in car rentals can be attributed to improved rural infrastructure and changing preferences among youth, the travel industry is still struggling with occupancy rates for high-end hotels dropping significantly. Cun Xiaoqin noted that mid- to low-end hotels are seeing price increases while high-end hotels remain stable. This shift in tourist behavior indicates a preference for off-peak travel, further complicating the recovery efforts of the travel sector [38dcc36c].
As the tourism landscape evolves, the rise of autonomous vehicles is also influencing the sector. Companies like Baidu are planning to deploy driverless taxis, which could reshape how tourists experience travel in urban areas. While traditional taxi drivers express concerns over job security, younger consumers are eager to embrace these innovations [0d346f87].
In this dynamic environment, China's tourism and transportation sectors are navigating both challenges and opportunities. With winter tourism initiatives underway, there is hope that the combination of winter sports and travel can help thaw the economy, although analysts caution that restoring consumer confidence is crucial for sustainable recovery [a9785184].