BEIJING, (Reuters) – Tourism revenue in China for the Golden Week holiday ended Thursday was down almost 5% year on year, according to state media reports. Meanwhile, lingering coronavirus restrictions saw a decrease in total trips taken.

This weighed heavily on China’s outlook for overall retail sales. Sales have been slower than expected since COVID-19 was introduced in a small number of Chinese cities last summer.

China’s National Day holiday, which runs from October 1-7 in China, is one of China’s busiest periods and an indicator for consumers demand in China’s second largest economy.

According to the People’s Daily, domestic tourism revenues reached 389.06 Billion Yuan (or $60.36 Billion). This report was made on Thursday. It cited data from China’s Ministry of Culture and Tourism.

This was 4.7% less than the year before, but still below 60% of revenues from the week prior to the pandemic.

Citi stated in a note, “The weakness in spend was due to the relative low prices of travel products as well as a shift toward shorter-haul travel.”

After the pandemic the recovery of consumption was slow and bumpy. There are still public health risk factors. The Delta wave is now contained but there remain risks of local and importing infection.

RISES FOR GROWTH

Nomura stated in a note that the slowing Golden Week data could have negative consequences for October retail sales and increase risks for China’s future economic growth.

With September’s retail sales data due to be out on October 18, the third-quarter gross domestic products data are due.

China has managed to limit the spread and severity of the coronavirus virus since it was first discovered in Wuhan (central China) in late 2019; however, the country is now taking a strict zero tolerance policy which can lead to economic disruptions that could be costly for the economy.

In China, the ministry recorded 515,000,000 domestic tourism trips in seven days. That’s a decline of 1.5% year on year and was only 70% below pre-pandemic levels.

According to China’s aviation regulator, flight bookings in the majority of tourist destinations were lower than last year.

The regulator reported that the airline passenger traffic for the holiday was 19.6% lower than 2020.

($1 = 6.4452 renminbi)