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A grim Lunar New Year awaits China’s hotels and restaurants as they now face rekindled travel restrictions and government advice to stay home and avoid large gatherings that will deal a major blow to domestic tourism this year.
The week-long holiday that begins on Friday traditionally kicks off one of China’s biggest spending waves, topping one trillion yuan ($ 155 billion) in 2019, ahead of the coronavirus disruptions, government figures show. .
“Our business is barely half what we usually see before the Lunar New Year,” said Lin Haiping, founder of Baheli, a meat stew chain with more than 100 stores in 16 cities.
“We are in a dilemma because we don’t want to have too many clients,” he added, citing the advice against large meetings as a reason to avoid promotional offers to boost business.
“I am afraid of having too many people under current policies.”
The tougher measures sparked by the recent sporadic outbreaks threaten a blow to transportation and tourism during the holidays that could cut up to 150 billion yuan ($ 23 billion) from household spending, brokerage CITIC Securities said.
Infections have recently fallen from a peak in mid-January, when the daily number of locally transmitted COVID-19 cases reached its highest level in more than 10 months.
Many people have canceled vacation flights or trips back to their hometowns after local authorities tightened measures for arrivals, such as requiring virus tests. Authorities also officially implemented anal swabs to screen for COVID-19 infections as part of their nationwide screening efforts to prevent potential carriers from going unnoticed.
Such cancellations, for example, have more than halved the cost of flights to the duty-free beach destination Sanya on the southern island of Hainan, a mecca for luxury goods purchases, as the pandemic deters travelers. Chinese traveling abroad.
Capri Holdings, owner of the Jimmy Choo and Versace luxury brands, told analysts that it expected strong sales performance from the Hainan outlets, although “not as strong as we had all anticipated”, thanks to the likely slowdown. of travel.
The Transport Ministry has estimated that passenger travel will fall 40% from the 2019 figure during the 40-day spring travel season, when millions of migrant workers typically head from cities to their homes in the countryside. .
Mainland China reported more than 2,000 domestic virus infections in January, but the recovery is on track in the world’s second-largest economy, which grew 2.3% over the year in 2020. In the month in question, the provinces from the north of the country were also battling new clusters of the coronavirus.
That made it the only major economy that prevented a contraction last year as many nations struggled to curb the pandemic, which also disrupted China’s Christmas festivities that year, also sending shockwaves to tourism sectors around the world.
Government warnings against large gatherings, such as weddings or company annual parties, also prompted cancellations.
“We are open, but there is no difference from being closed,” said Shen Xiaolin, manager of Qingxi Guesthouse in eastern Zhejiang province.
The 17-room boutique hotel has no vacation guests this year, a far cry from previous years when it was booked all week.
As many people choose to stay in their workplace, some companies are betting on consumption in the city to get a break, but they still have to deal with the pressure to limit customers.
The Hotpot Haidilao chain is among the companies that turn to technology to relieve those headaches.
It has launched an online streaming service that offers video conferencing facilities for diners to simultaneously enjoy with family and friends at outlets in other cities.
The service is available in 52 restaurants in 41 cities in China, as well as five in Indonesia, Malaysia and Thailand.
“We deliberately chose some outlets in the third- and fourth-tier cities, where many young people … cannot go home this year,” said Zhou Zhaocheng, strategy director at the firm.
“We are trying to make people feel together, even though they are physically apart.”
