Shenwan Hongyuan Group: The willingness to travel is resilient, and the average customer spending in the leisure service industry has increased.

Shenwan Hongyuan Group research report shows that both the number of people traveling and the consumption during the Mid-Autumn Festival holiday have increased, with a noticeable boost in per capita spending. Domestic tourists spent a total of 51.05 billion yuan on travel, an 8% increase compared to the same period in 2019. Calculated per capita spending was 477 yuan/person, recovering to 106% of 2019 levels. Short-distance travel was the main focus during the Mid-Autumn Festival holiday, with inter-provincial transportation slightly affected by adverse weather conditions, while city transportation and self-driving saw a steady increase. Renting cars for self-driving trips back home in major cities became a trend. Hotel prices experienced a slight decline but occupancy rates remained stable. Concerts, local performances, and experiential consumption were popular, showing promising prospects and effectively driving up per capita spending. The Mid-Autumn Festival saw an increase in both the number of people traveling and their spending, with a noticeable boost in per capita spending. According to the data from the Ministry of Culture and Tourism, there were 107 million domestic trips during the 24-day Mid-Autumn Festival holiday, a 6.3% increase compared to 2019. Domestic tourists spent a total of 51.05 billion yuan on travel, an 8% increase compared to the same period in 2019. Per capita spending was calculated to be 477 yuan/person, recovering to 106% of 2019 levels, a 30% increase compared to the Dragon Boat Festival holiday. Shenwan Hongyuan Group research believes that this year's Mid-Autumn Festival holiday again achieved an increase in both volume and prices, with per capita spending recovering to exceed 2019 levels for the second time (the first time being during the Qingming holiday in 24). Despite adverse weather conditions such as typhoons in Jiangsu, Zhejiang, Shanghai, and rainy conditions in Northeast and Southwest China, the number of travelers saw a slight decrease while travel consumption data saw a boost in comparison to previous holidays. Shenwan Hongyuan Group research suggests that this may be due to 1) experiential consumption such as concerts and folk performances driving up per capita spending; 2) the increasing trend of taking additional days off leading to a higher proportion of long-distance travelers. The Mid-Autumn Festival holiday mainly focused on short-distance travel, with inter-provincial transportation slightly affected by adverse weather conditions, while city transportation and self-driving saw steady increases. Here are some key points: 1) Aviation: According to FlightStats, during the 24 Mid-Autumn Festival period, the number of air passengers reached 5.069 million, a slight increase of 1.2% compared to 2019. The total number of civil aviation passenger flights during the three-day Mid-Autumn Festival reached 40,100, a decrease of 8.5% compared to the previous period, and a 5.6% decrease compared to 2019, showing a "V" trend with flight volumes reaching a low point on the second day. The decrease in flights can be attributed to a higher number of short-haul trips during the Mid-Autumn holiday, coupled with the proximity to the National Day holiday, along with a lack of public and business travelers, resulting in a slight decrease in travel numbers during off-peak days. Some flights were also canceled due to typhoon effects. 2) Railways: According to the Ministry of Transport, railway passenger volume on the first day of the Mid-Autumn holiday reached 170.85 million, a 0.9% decrease compared to the first day of the Dragon Boat Festival holiday. Railway transport volume during the three-day holiday was 425.7 million, a 7.5% decrease compared to the Dragon Boat Festival holiday, mainly due to the influence of typhoon weather. 3) Road trips: Showed a tidal characteristic, mainly short-distance self-driving trips. On the first day of the Mid-Autumn holiday, the number of people traveling on the road reached 196 million, a 4.1% increase compared to the Dragon Boat Festival holiday. During the three-day holiday period, road transport volume showed a slight decrease of 0.5% compared to the Dragon Boat Festival holiday. According to data from Ctrip, this year saw a 20% increase in domestic car rental orders compared to the Dragon Boat Festival holiday, with major cities witnessing a trend of renting cars for self-driving trips back home. 4) Subways: Comparing subway passenger traffic during this year's Mid-Autumn and Dragon Boat Festival holidays, there were changes in passenger traffic in major cities: Beijing (+8%), Shanghai (-27%), Guangzhou (+3%), Shenzhen (+6%), Wuhan (-1%), Chengdu (-2%), Chongqing (-16%), and Changsha (+5%). Hotel prices experienced a slight decline but occupancy rates remained stable. Concerts, entertainment events, and experiential consumption were popular and effective in driving up per capita spending. Looking at overall data, the increase in accommodation supply, with individual hotels and guesthouses relying on online travel agency (OTA) platforms to attract traffic and decrease overall hotel prices. Chain hotels with their own channels have a stronger pricing strategy. According to data from Qunar, the national average hotel (including guesthouses) occupancy rate from September 9th to September 15th was 56.81%, a decrease of 1.8% compared to the Dragon Boat Festival holiday week (June 3rd to June 9th), with an average daily rate (ADR) of 190.58 yuan, a decline of 4% compared to the previous period. This year, events such as concerts saw a doubling in demand compared to the previous year. According to the "2024 China Concert Report for the First Half of the Year," in the first half of 2024, the concert market had a rise in supply and demand, with a total of 1,182 shows, including 874 shows with over 3,000 seats, a 331% increase year-on-year. The total number of concert attendees in the first half of the year reached 11.92 million, with shows having over 3,000 seats attracting 11.686 million attendees, a 333% increase year-on-year. Kanye West's world tour listening event in Haikou attracted nearly 40,000 attendees. The event generated ticket revenues of around 51 million yuan and boosted Haikou's tourism income to 3.73 billion yuan, with hotel bookings in Haikou seeing a 140% increase compared to the Dragon Boat Festival holiday. Investment analysis opinion: Shenwan Hongyuan Group research believes that travel and tourism consumption are resilient. Stable demand, along with improvements in transportation and capacity on the supply side, will help achieve business growth. Although hotels may face short-term pressures, those with strong internal traffic pools will have more pricing power in the long run. Recommended stocks: 1) Tourist attractions: Songcheng Performance Development (300144.SZ), Changbai Mountain Tourism (603099.SH), Anhui Jiuhuashan Tourism Development (603199.SH), Emei Shan Tourism (000888.SZ), Huangshan Tourism Development (600054.SH), Jiangsu Tianmu Lake Tourism (603136.SH), China Cyts Tours Holding (600138.SH); 2) HotelsShops: Shanghai Jin Jiang International Hotels (600754.SH), BTG Hotels (600258.SH); 3) Catering: Tongqinglou Catering Corporation (605108.SH), Guangzhou Restaurant Group (603043.SH); 4) Exhibitions: Zhejiang Meorient Commerce & Exhibition Inc. (300795.SZ); 5) Duty-free: China Tourism Group Duty Free Corporation (601888.SH), Wangfujing Group (600859.SH).Risk Warning: Risks of residents' income and consumption recovery falling short of expectations, as well as risks of exchange rate fluctuations.