Surging fuel surcharges and a wave of flight cancellations are denting Chinese outbound demand during the Labour Day holiday – traditionally one of the busiest travel periods of the year.
As jet fuel prices climb to new highs, airfares have gone up by at least five to 10% while the average tax-inclusive airfare for China’s domestic routes has also jumped by 14% year-on-year (YoY) to over 1,000 yuan (US$137), the China News Service reports.
The rising costs are also triggering capacity cuts on multiple carriers – including Air China, China Eastern Airlines, Spring Airlines and AirAsia – which have reduced or suspended flights between China and popular Southeast Asian destinations such as Bangkok, Phuket and Kuala Lumpur, according to domestic media reports.
Data from the China Air Transport Association shows international flight cancellations during the May Day period have climbed to 7.4%, with around 785 flights scrapped – more than double last year’s level.
Against this backdrop, more Chinese travellers are staying closer to home. Domestic flight bookings have hiked by 8% compared to the same period last year, while tour package reservations have increased by 10%, according to a survey travel marketing and technology firm China Trading Desk.
Rail gains as proximity matters
The Guangdong-Hong Kong-Macao Greater Bay Area is among the key beneficiaries, supported by high-speed rail connectivity from mainland cities.
“Mainland China business has some uncertainty due to some cancellations of flights due to the looming energy crisis, but this is offset by [travellers who are turning to] high speed rail to Zhuhai, adjacent to Macao,” observes Rutger Verschuren, area VP of Macau operations for Artyzen Hospitality Group.
Verschuren expects a “very good” hotel room occupancy across the five-day holiday, supported in part by room rates that are about 10% lower than 2025.
Macao authorities are expecting average daily crossings of 720,000 to 740,000, and total inbound and outbound border crossings to reach about 3.6 million to 3.7 million over the long weekend.
Neighbouring Hong Kong is also seeing strong demand.
"We are encouraged by our Labour Day performance in May, with group room revenue pacing 10% ahead of the same period last year,” says Crystal Chan Busch, group director global sales, Wharf Hotels Management Limited. She notes that these bookings are mainly driven by mainland Chinese visitors.
Speaking with local Radio Television Hong Kong, Miramar Group COO Alan Chan says that its hotels in Causeway Bay and Tsim Sha Tsui are at 95% capacity for the weekend – despite higher room prices by about 8% from last year.