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2026-10-09 14:45:54 G Sachs published a research report stating that a Golden Week review of China's travel and leisure sector showed that domestic travel demand in China was relatively soft YoY, while outbound travel demand was more resilient than expected. Rising international air ticket prices, coupled with continued tensions in China-Japan relations, drove more travelers toward nearby Hong Kong, Macau and other short-haul destinations. The broker noted that, affected by the Mid-Autumn Festival and National Day holiday arrangements, as well as some travelers choosing to avoid crowds by traveling earlier or later, nationwide cross-regional passenger flows from Oct 1 to 7 increased only 0.7% YoY. Air passenger traffic was broadly flat, self-driving travel fell 1.3% YoY, while railway, highway and waterway traffic rose 13%, 7% and 8% YoY respectively. For outbound travel, total border crossings increased 6.7% YoY to about 15.5 million, slightly above the government target of 15.1 million. Among them, Chinese travelers accounted for 8.9 million trips, up 9% YoY. Average international airfares increased about 6% YoY. Capacity growth was faster for Indonesia, S Korea, Thailand and Australia, while capacity to Japan fell 47% YoY. Mainland Chinese visitors to Hong Kong and Macau increased 9% and 11% YoY respectively, while inbound arrivals to China rose 5% YoY, below expectations. By segment, air passenger traffic rose about 2% YoY, below the Civil Aviation Administration's guidance of about 4%, including outbound traffic growth of 4% and domestic growth of 1%. Hotel RevPAR was broadly flat to slightly higher YoY. Hotel bookings on TONGCHENGTRAVEL (00780.HK)'s platform recorded high double-digit YoY growth, while bookings for three-star or above hotels rose about 30% YoY. Hainan duty-free sales increased 3.5% YoY, shopping visitors rose 14.4%, while per capita spending fell about 9.5% YoY to RMB7,000. Macau's average daily visitor arrivals exceeded 170,000, up 8% YoY, while average daily GGR was about MOP1.03 billion, down 7% YoY. Hong Kong visitor arrivals increased 6% YoY to 1.6 million, including 1.4 million Mainland Chinese Visitors (MCVs), up 9% YoY and above government expectations. The broker maintained Buy ratings on GALAXY ENT (00027.HK) and SANDS CHINA LTD (01928.HK), expecting both companies' EBITDA to recover faster in 3Q26 results, while awaiting an inflection point driven by relatively low earnings and margin bases in 4Q26 to support re-rating. In the hotel sector, HWORLD-S (01179.HK) and Atour Lifestyle Holdings Limited (ATAT.US) delivered solid performance in 3Q26. Among OTAs, the broker remained more positive on TRIP.COM-S (09961.HK)'s revenue growth and narrowing overseas business losses. It maintained a Neutral rating on CTG DUTY-FREE (01880.HK), believing duty-free sales recovery largely depends on local government consumption voucher distribution, with limited visibility. The broker was also more cautious on airlines, as rising fuel costs may not be fully passed through via surcharges. (da/j)~ AASTOCKS Financial News Website: www.aastocks.com This article was automatically translated by AI, the Chinese version should be considered the authoritative version. AASTOCKS.com Limited does not guarantee its accuracy or completeness and accepts no liability for any damages or losses arising from the use of this translation. | |