Mid-Autumn, Golden Week to boost Hong Kong retail spending

Sa Sa is expected to benefit most amongst Jefferies’ coverage.

Hong Kong retailers could see stronger spending from Mainland Chinese visitors during China’s extended Mid-Autumn Festival and National Day holiday period, as longer breaks encourage travel and improve visitor spending, according to Jefferies.

The Mid-Autumn Festival falls on 25 September, followed by the National Day holiday from 1 to 7 October. With only three working days between the holidays, employees taking leave from 28 to 30 September could create a 13-day break, encouraging earlier departures and longer-distance travel.

Jefferies expects Hong Kong retail to benefit from stronger monetisation of Mainland visitors, with spending conversion among Mainland tourists remaining elevated. It also said outbound spending leakage has stabilised, while a stronger yuan is supporting tourists’ purchasing power.

The extended holiday is also expected to support dining and travel demand across China, particularly for longer trips. However, Jefferies said the scale of the uplift will depend on consumer spending sentiment.

The firm expects weak consumer sentiment to continue concentrating discretionary spending around major festive periods, with Chinese New Year remaining the most important consumption season, followed by Golden Week.

Travel demand is already moving into late September. As of 14 September, searches for the Mid-Autumn Festival and National Day holidays on Tongcheng Travel rose 278% month-on-month, with flight, hotel, car rental, and holiday package bookings all increasing.

Qunar data showed advance hotel bookings in popular destinations up nearly 40% year-on-year, whilst flight bookings made one month ahead rose 21%.

The number of travellers departing between 28 and 30 September also increased 52% year-on-year.

Longer trips are also gaining popularity. Tuniu data showed itineraries lasting four to six days accounted for 31% of bookings, whilst trips exceeding 10 days made up 26%.

Tongcheng said bookings for domestic air routes longer than 1,200km increased 34% year-on-year.

Domestic travel demand is concentrated in Xinjiang, Northwest China, Northeast China and western Sichuan. For outbound travel, demand is split between short-haul Asian destinations and longer-haul trips to Europe and Australia and New Zealand.

Jefferies does not expect the holiday to drive a meaningful improvement in consumer sentiment or a structural shift in spending patterns.

However, better weather and holiday-related consumption stimulus, including local government vouchers, could support spending compared with July and August.