Orient Securities: Spring and Autumn Holiday Promotion Implemented, Service Sector Adjustments Create New Investment Opportunities

Oriental Securities released a research report stating that, with the launch of the spring and autumn holiday promotion taking effect, it can not only drive parent-child customer groups to travel over longer distances, creating new integrated scenarios of “education + culture and tourism”; it is also more conducive to smoothing peak-and-slump travel patterns, promoting taking time off during the off-season, recreating the Golden Week through combined holidays and consecutive days off, and unlocking consumers’ spring and autumn holiday spending potential. Meanwhile, the Shenwan Social Services Index has undergone a substantial adjustment since mid-January. As Qingming and May Day are approaching, there may be a Qingming mini–holiday market trend.

The main points of Oriental Securities are as follows:

Spring holiday + Qingming holiday consecutive days off increases overall travel booking demand

Tongcheng released its Qingming holiday forecast: 1) As of March 23, the year-over-year growth rate in search and booking demand for flights, hotels, homestays, tickets, and so on during April 1–6 (spring holiday + Qingming holiday) is close to doubling. 2) From April 1–2, the average air ticket price increased by more than 30% month-over-month compared with the previous week. 3) Extending the 6-day holiday radius boosts travel. For domestic long-haul segments above 800 kilometers, the booking growth rate is notably higher, and the search demand for outbound and inbound flights shows a year-over-year growth rate exceeding 50%. 4) It drives parent-child travel and family travel. As of March 23, the proportion of parent-child travelers for Qingming is close to 25%, representing a clear increase versus previous years.

Provinces and cities implementing the spring holiday see travel heat higher than other places

Tongcheng data shows that, as of now, provinces including Jiangsu, Zhejiang, Sichuan, and others have clearly piloted and implemented the spring holiday, and in many places the time off period aligns with Qingming, forming a 6-day mini–Golden Week. Since mid-March, booking demand for travel products in places such as Nanjing, Suzhou, and Chengdu has shown particularly strong growth. Among them, Nanjing users have the highest increase in booking demand, up 148% year over year. Suzhou and Chengdu users’ booking demand increases are 126% and 113%, respectively, leading other cities nationwide.

Policy “wind” continues to be released, which is favorable for the spring and autumn holidays to roll out across a wider domestic scope

On March 30, China Education News–China Education Daily (under the supervision of the Ministry of Education; the only domestic national education industry daily) published an article titled “Let Spring Break for Primary and Secondary Schools Bring Out Its Due Value,” again mentioning that “for families with dual-income working parents, spring break often means ‘it’s easy to take time off, but hard to arrange,’ and it requires coordinated efforts among schools, families, and society to jointly solve parents’ childcare issues.” Jiangsu’s multiple local authorities have successively issued initiative letters encouraging employers to arrange staggered vacations for employees during the spring break for primary and secondary schools. In Guangdong, while encouraging students to participate in outdoor practice activities, authorities also guide each school to simultaneously launch personalized, tiered custodial services. The firm believes that, from central ministries and commissions down to local governments, efforts are being made to encourage the implementation of spring and autumn holidays nationwide to promote consumption.

Investment recommendations and investment targets

On the main theme: 1) Listed companies in provinces and cities that have already implemented spring holidays benefit, and relevant targets include: Tianmu Lake, Jinling Hotel, Songcheng Performance, Emei Mountain A. 2) Favorable for national scenic spots and famous mountains and rivers: Yellow Mountain Tourism, Guilin Tourism. 3) Favorable for nationwide network-based business formats; relevant target: Capital Hotel.

Risk warnings

The recovery of the macro economy and residents’ income may fall short of expectations, potentially suppressing discretionary consumption and travel demand; changes in industry and regulatory policies involve uncertainty, which may affect the prosperity of sub-sectors such as hotels, scenic spots, duty-free, and education; increased competition and rising costs may erode companies’ profitability; volatility in the overall market valuation may increase, and there are risks of phased adjustments in the sector.

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