Chinese travelers are making more last-minute trips as they change into more cautious about spending amid the weak economic recovery.
There is a “real crisis of consumer confidence” in China, says Anthony Caputano, President and CEO of Marriott International said at the Bank of America Gaming and Lodging Conference last Thursday.
More and more Chinese consumers are booking hotels up to 3 days prematurely, which he says is the bottom level ever and far shorter than the virtually 20-day booking window for consumers in the remaining of the world.
Travelers are planning their trips closer to departure as they struggle to “take advantage of last-minute deals,” economists at Oxford Economics told CNBC. They noted a shift in consumer preferences: “Modern travelers prefer spontaneity in their travel plans.”
The shorter booking periods – which often indicate increased uncertainty and consumer reluctance to spend – make it difficult for firms to predict and prepare for demand, especially given China’s slow recovery, said Patrick Body of Cheung Kong Graduate School of Business.
As the world's second-largest economy struggles with a persistent housing crisis and high unemployment, Chinese consumers have change into more frugal on all the things from groceries to travel.
“While people still want to go on holiday, sentiment regarding income and consumption remains depressed,” say economists at Oxford Economics.
In fact, China is often known as a market with consistently short booking periods, in keeping with a report by World Travel and Tourism Council in 2021. In 2019, 70% of hotel bookings on travel agency Trip.com were made inside three days of check-in. This proportion rose to over 80% in the primary two years of the pandemic, reflecting the high uncertainty of travel restrictions throughout the pandemic.
In July, Marriott International lowered its growth forecast for revenue per available room this yr, citing “currently weak demand and price trends” in China.
This price pressure is reflected throughout the industry, including domestic travel agencies. Trip.comwhich reported average prices for domestic hotels and flights continued to say no this yr.
During the Labor Day holiday in May – one in all the country’s longest holidays of the yr – China recorded more domestic travel and tourism spending than in 2019, in keeping with the Ministry of Culture and TourismBut average spending per traveller continues to be below 2019 levels.
The trend of individuals preferring short-distance travel to smaller cities or counties will proceed, says Oxford Economics, which could boost the economy there.
Travel demand throughout the upcoming Golden Week in early October is anticipated to exceed 2019 levels, economists said.
When asked in regards to the outlook for the second half of the yr, Trip.com CFO Xiaofan Wang said the corporate has “very limited visibility due to the short booking window.” The platform expects booking activity to select up after the National Day holiday, as booking numbers were lower throughout the same period last yr, it said.
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