Summary of Key Points
This summer's peak travel season was a disappointment, with businesses in the hospitality, civil aviation, tourism, and car rental industries all experiencing significant declines: hotel room revenues fell by more than 7%, and the occupancy rate of homestays in Dali dropped from 80% to less than 50%; air ticket prices were 8% lower than last year (with the base price approaching 20%, sometimes even cheaper than high-speed rail fares); car rental profits in Xinjiang were halved, with 80% of vehicles sitting idle in garages; tourism businesses saw a decline of over 30%. On the surface, these issues may be due to reduced consumer spending, weather conditions, or the impact of the World Cup, but the fundamental reason is the drastic decrease in the core customer group for summer travel (young children). There are 14 million fewer children in kindergartens and 4 million fewer in primary schools this year, and this trend is expected to accelerate. This year might actually be the best summer season we will see in the next decade.
The Summer Travel Industry as a Whole Faces a Cold Wave: From Hotels to Car Rental, Everyone Is Struggling
This year's summer travel slump was not limited to just one sector; the entire chain has been affected:
- Hotel Industry: Revenues per room (RevPAR) decreased across all hotel types, from budget to luxury. Budget hotels saw a 8.2% drop (3.7% decrease in room prices + 4.7% decrease in occupancy rates), mid-range hotels by 7.8%, and even luxury hotels experienced a 0.2% decline in occupancy rates. Homestays in Dali fared even worse, with occupancy rates dropping from 80% to less than 50%, and some only had 10% occupancy this year.
- Civil Aviation Industry: The tax-inclusive price of domestic flights in the second week of July was 899 yuan, down 8% from last year; without fuel surcharges, the base price dropped by nearly 20%, resulting in a situation where air tickets were cheaper than second-class high-speed rail fares.
- Tourism & Car Rental: Tourism businesses experienced a decline of over 30%; car rental profits in Xinjiang were halved, with only 0.3 out of 21,000 tourist vehicles getting bookings, and 80% of the vehicles remaining unused. Rent for popular off-road vehicles (such as the Tank 300 and Prado) also fell by 30-40%.
Consumers' Reverse Behavior: Early Bookings Lead to Losses; Prices Get Cheaper as the Travel Date Approaches
In previous years, booking flights and cars in advance saved money, but this year the situation is reversed:
- A netizen spent 12,000 yuan on a flight to Xinjiang in May, which dropped to 8,000 yuan by the time of travel. The rental price for a car in early June was 6,500 yuan, and it further decreased to 3,600 yuan by mid-to-late June, with prices continuing to drop until departure.
- The reason is that businesses misjudged demand, raised prices too early, and then had to sell them at reduced prices due to insufficient customer interest. Netizens joked, "Who would have thought booking in advance would be such a loss?"
The Root Cause: A Decline in Children
The core issue behind the decline in summer travel is the disappearance of the young child demographic:
- Young children are the driving force behind summer travel; they have no pressure to prepare for exams or attend extra classes, and parents are more willing to take whole families (including themselves and grandparents) on long trips, spending thousands to tens of thousands of yuan each time. For example, a family of three could easily spend over 10,000 yuan on domestic travel including flights, hotels, and meals.
- However, the number of children is decreasing: From 2022 to 2025, the number of children in kindergartens nationwide will decrease by 14 million (equivalent to the population of a major city); by 2025, the number of primary school students will drop by 4 million annually. The situation will get worse: The 17.86 million children born during the second-child boom in 2016 will graduate from elementary school around 2028 and completely stop contributing to summer travel spending.
A More Severe Future: This Year Could Be the Best Summer in the Next Decade
Many business owners consider this year the worst summer season, but the reality is that this year might actually be the best of the next ten years:
- The birth rate continues to decline, meaning the core customer group for summer travel (young children) will continue to shrink each year. After 2028, the number of children from the second-child boom will leave elementary school, leading to an even faster decline in customer numbers.
- The division of vacation time between spring and autumn holidays and changes in consumer behavior (such as a preference for shorter trips) will also make the summer peak season shorter and may eventually lead to its disappearance.
In One Sentence
The essence of the decline in summer travel is the loss of children as a driving force for family outings. Without enough young children to support travel, no amount of price cuts will be able to revive the peak season. This year's poor performance is just the beginning of what lies ahead for the next decade.