Stuck in China, consumers are spending millions for luxury goods in Hainan

People wear masks while walking along a street on October 3, 2021 in Wuhan, Hubei province, where a yellow high temperature warning was issued as the maximum temperature reached 98.6 Fahrenheit.
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BEIJING — Chinese consumers opened their wallets to shop during the week-long National Day holiday that ended Thursday, even as travel numbers fell compared to the previous year.

Sales at nine duty-free shops in the southern island province of Hainan totaled nearly 1.64 billion yuan ($252.3 million) from Oct. 1 to 6, according to state media. That marked an increase of 75% from the same period in 2020, and more than four times more — or a 359% jump — compared to the same period in 2019, the report said.

Hainan has become a popular destination for Chinese shoppers who used to travel overseas before the pandemic to buy luxury goods.

The pandemic still weighed during this year’s National Day holiday, also known as China’s “Golden Week.” It has historically been a popular time to travel since it is one of two lengthy holidays in a country where workers have few personal vacation days.

However, Beijing’s “zero-tolerance” policy for controlling the pandemic means that stringent contact-tracing and lockdown measures can restrict travel at a moment’s notice — as they reportedly did this week for tourists in Xinjiang. Anecdotally, some schools in Beijing discouraged students and teachers from leaving the capital city for the holiday.

Tourism spending of 389.1 billion yuan from Oct. 1 to 7 was only about 60% of what it was in 2019, and down 4.7% from the same period in 2020, according to China’s Ministry of Culture and Tourism.

Tourist trips reached 515 million during the week-long holiday this year — about 70% of 2019 levels and down 1.5% from 2020, the ministry said.

Chinese travel booking site Trip.com said Beijing surpassed Shanghai as the most popular destination, thanks to the newly opened Universal Studios resort on the outskirts of the capital city.

Nationwide bookings for car rentals during the holiday this year rose by 43% compared to the same holiday season in 2019, according to Trip.com. The report said average one-way airplane ticket prices rose 7% from a year ago to 821 yuan.

Disclosure: NBCUniversal is the parent company of Universal Studios and CNBC.

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