Chinese Travel Stocks Surge as Lunar New Year Travel Demand Soars
Chinese travel stocks experienced a surge in trading on Monday following government data that highlighted the strong domestic travel industry during the week-long Lunar New Year break. China Tourism Group Duty Free Corp, listed on the mainland Shanghai Stock Exchange, gained 1.2%, indicating a positive start to the post-holiday period.
In Hong Kong, Tongcheng Travel Holdings saw a rise of 1.8%, while Trip.com registered a 0.2% increase. The main exchanges in China reopened on Monday after a week-long holiday hiatus for the Lunar New Year festivities.
The Ministry of Culture and Tourism reported an impressive 34.3% increase in the number of domestic tourism trips, reaching a staggering count of 474 million, during the eight-day holiday compared to the same period last year. This surge also represents a 19% growth compared to 2019, a pre-Covid-19 time when the economy was not affected. The data further disclosed that there were approximately 6.83 million tourist trips overall, including 3.6 million outbound and 3.23 million inbound.
Citi analysts predict that travel companies in the first quarter will witness substantial year-on-year growth in online travel revenue. This prediction is based on the high demand for Lunar New Year travel combined with last year's low base.
The holiday season has proven to be a pivotal moment for the Chinese travel industry, with stocks rising and exceeding expectations. The surge in domestic travel indicates that the industry is recuperating well from the impacts of the Covid-19 pandemic. As global travel restrictions continue to ease, it remains to be seen how this positive trajectory will develop in the coming months.
Analyst comment
Positive news. The robust domestic travel during the Lunar New Year break in China has led to increased trading for Chinese travel stocks. The market is expected to see solid growth in online travel revenue in the first quarter due to high demand and a lower base from last year.
