Goldman Sachs: Healthy Spring Festival Travel Data, Hotel Industry Performance Shines

Goldman Sachs published a report indicating that the overall tourism data during the Spring Festival is healthy, with domestic tourist numbers increasing by 19% year-on-year to 596 million, and tourism spending rising by 19% year-on-year to 803 billion RMB, with a daily average growth of 6%. The number of outbound travelers increased by 24% year-on-year to 4.8 million, with Japan routes decreasing by about 50% year-on-year, but the transfer demand for Southeast Asia and South Korea routes offset some of the impact with a year-on-year increase of 10-40%.

The report stated that the hotel industry performed well during the Spring Festival, with revenue per available room driven by average room rates, growing year-on-year by a mid to high single-digit percentage. Airline ticket prices also performed better than expected, constrained by tight capacity, with domestic route ticket prices increasing by 7% year-on-year and international route ticket prices increasing by 15% year-on-year. Hainan's duty-free shops performed below expectations, with daily average sales only growing by 15%, down to 45% in January, mainly due to a decline in per capita spending. Macau's daily average gaming revenue was 786 million MOP, a year-on-year increase of 5%, falling short of the expected 850 million to 900 million MOP, partly due to a decrease in VIP room win rates.

The firm believes that the fundamentals are more favorable for hotel stocks rated as "buy," including H World-S (01179.HK), Atour (ATAT.US), and Macau stocks including Galaxy Entertainment (00027.HK), Sands China (01928.HK), as well as airline stocks including Air China (00753.HK) and China Eastern Airlines (00670.HK)