Holiday spending slumps amid sharp rise in Covid infections

Covid cases in China rose sharply over the week-long National Day holiday while travel, tourism, and spending all slumped sharply.

Sunday saw 1,939 new cases across 29 provinces.

Outbreaks quickly spread in northwestern regions of Xinjiang and Inner Mongolia. On Sunday, the Xinjiang CDC said community transmission hasn’t been stopped and there was still a high risk of the outbreak rebounding. During the holiday week trains from the region were also suspended to limit the outbreak from spilling into other provinces.

In Inner Mongolia, officials said they identified a new omicron variant, BF.7, which is more infectious and transmissible. As the omicron has already stressed the country’s zero covid policy during 2022, an even more infectious variant could lead to even further disruptions.

In Shanghai, cases rose to the highest level in nearly 3 months triggering a wave of localized lockdowns across the city. Several blocks of the city’s Changning district were fenced off as the areas was declared a medium risk zone and reports of 2 and 7 day building specific lockdowns were widespread.

State media outlet Shanghai Daily also published an article entitled “Here’s what you should do if your health code turns red” after a large number of residents found their health codes change unexpectedly.

While many of the outbreaks were attributed to cross-province travel, travel was down sharply compared to last year.

Total passenger traffic was down 36.4% compared to 2020, down 41.4% compared to 2021, and down 58.1% compared to 2019. Tourism revenue also declined sharply, falling 26.2% year on year and down 55.8% compared to 2019.

The weaker environment was also reflected in airline tickets, which were the cheapest in the past 5 years. Prices for holiday airline tickets were down 12% compared to 2021, and down 20% compared to 20219.

Stocks prices of companies in tourism and hospitality also fell sharply as markets reopened on Monday morning. Xi’an Catering, a restaurant group, fell by the limit of 10% while other hotels, restaurant chains, and tourism companies also saw their stocks dip.