News Alert: China Internet Sector: Weak Golden Week holiday tourism data with tourist trips declined 18%, while local consumption remained resilient
- National Day holiday tourist trips and domestic revenue declined by 18% and 26% respectively, below market expectations, according to China’s Ministry of Culture and Tourism
- The sluggish data was mainly due to stringent movement restrictions caused by Covid resurgence in several regions
- Local consumption remained resilient given local and short-distance tours accounted for 65% of the tourism market this year as many did not want to travel far but still want to explore
- Meituan’s daily transaction volume of core local commence increased by 52% compared with the same period in 2019 level during the holiday; Maintain BUY
What’s New
– China’s Ministry of Culture and Tourism reported that China recorded 422 million tourist trips over the seven-day National Day holiday (1-7 Oct), down 18% from last year’s holiday season, or just 61% of pre-pandemic 2019 level, below market expectations.
– Domestic tourism revenue was Rmb287.2 bn, down 26% yoy or just 44% of the pre-pandemic 2019 level. The sluggish data was mainly due to stringent movement restrictions caused by Covid resurgence in several regions.
– Local and short-distance tours accounted for 65% of the tourism market this year as many did not want to travel far but still want to explore during the week-long holiday, according to data from China’s largest online travel agency Ctrip.
– Meituan data shown that local consumption become the major engine for holiday economy, and daily transaction volume of core local commerce increased by 52% compared with the same period in 2019 level. In the first five days of the holiday, the number of in-store dining orders increased by 47% compared with the Labor Day holiday in May this year. (News link: https://t.cj.sina.com.cn/articles/view/2286037382/8842298602001764j)
Our View:
– We expect that with the gradual control of the Covid resurgence, pent-up demand will be further released.
– Among e-commerce players, we like Meituan most at this trajectory as the local consumption leader should be the key beneficiary of the resilient demand for local commerce.
– Maintain BUY on Meituan (3690 HK) with TP of HK$296, Tongcheng travel (780 HK) with TP of HK$19.
