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China’s Golden Week’ travel boom masks a bruising price war

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10 months ago

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Tourists visit the Confucius Temple market area in Nanjing, Jiangsu province, China, on Oct. 1, 2025.

Cfoto | Future Publishing | Getty Images

BEIJING — The latest sign of hyper-competition, or “involution,” has emerged in China’s tourism industry, adding to concerns about growing deflationary pressure in the broader economy.

Over the Oct. 1 to 8 public holiday — dubbed “Golden Week” — total domestic tourism trips reached 888 million and generated 809.01 billion yuan ($113.63 billion) in revenue, according to official data released Thursday. That’s up by 1.8% and 7.6% from last year, respectively, according to CNBC’s calculations of the figures.

The gains, however, slowed from the May 1–5 holiday earlier this year, when domestic trips and tourism revenue grew 6.4% and 8% respectively. In fact, average spending per domestic tourist trip during the Golden Week was also around 3% lower than in 2019 before the pandemic, Goldman Sachs pointed out Thursday.

“The Golden Week was ‘Golden Weak,'” said Mix Shi, founder of PoshPacker Hostels Chengdu Group.

Although his three hostels in the city ended up being fully booked, Shi said he had to cut nightly rates by about 60% — because nearby hotels dropped prices even more.

“Way too much money has been pouring into the hotel industry lately,” Shi said, noting, “the competition is insane, and some really nice places are going for dirt cheap. It’s great for travelers because they have more choices, but it’s a real blow to hostels.”

Chengdu, the capital of Sichuan province in southwestern China, ranked second to Nanjing, capital of Jiangsu province in the east, in tourism spending for the holiday on the Meituan online booking platform.

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Among local and international visitors to hostels in mainland China, Chengdu’s popularity more than doubled from last year’s Golden Week, second only to Shanghai, according to HostelWorld. Still, average bed prices fell more than 20% in both cities — to 165.70 yuan ($23.27) in Shanghai and 80.99 yuan in Chengdu.

While most locals have only a handful of paid days off each year, China has sought to encourage businesses to give workers more vacation days and extended official public holidays to boost consumption.

This year’s Golden Week was one day longer than usual because it coincided with the Mid-Autumn Festival, which follows the agrarian calendar. The festival fell on Oct. 6 this year, versus Sept. 17 last year.

“The Mid-Autumn Festival is considered to be a family reunion festival,” said AJ Wang, owner of the X Hotel and Observatory Hill House venues in the northeastern coastal city of Qingdao.

“The real Golden Week, in terms of revenue generation, actually ends on the 6th,” he said, noting he had to cut prices after that date by 60% due to falling demand.

Official domestic tourism revenue for the Golden Week alone rose by 15.4% from 2024, but when including last year’s Mid-Autumn Festival revenue figures, the comparable revenue growth slowed to 7.6%, CNBC calculations showed.

“Everyone’s working harder, spending more, but the profit gap stays small,” said Sasa Yau, who runs a hostel and restaurant in the southern city of Guangzhou.

Yau said his daily restaurant sales surged from the typical 3,000 yuan to as much as 10,000 yuan during the Golden Week, with the average customer spending just 30 yuan.

“We were busier than ever and broke our revenue record,” Yau said. “There are only four of us running the show, so by the end of the week we were so tired that when I said, ‘Let’s celebrate with a late-night meal!’ everyone just said, ‘Can we celebrate by sleeping instead?'”

Hunting for deals

In Chengdu, famous for its Giant pandas and spicy food, Shi said travelers tend to book rooms only a day or two in advance instead of a week or two ahead, making accommodation rates unpredictable

China’s vast network of high-speed trains and airports — with flights sometimes cheaper than train tickets — has made travelling on a whim fairly easy. Large price swings and challenges in booking tickets for the first or last day of a public holiday are pushing travelers to stagger their trips when possible — and save money.

Many tourists chose to travel slightly before or after the Golden Week period this year, according to Chinese travel booking site Trip.com. It noted that hotel prices in late September were about 20% cheaper than during the Golden Week, while mid-holiday airfares were more than 30% cheaper than at the start of the break.

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Alibaba-owned travel booking site Fliggy said average spending per travel booking rose 14.6% from a year earlier, and noted that far cheaper flights started the weekend after the holiday, such as a flight from Shanghai to Hong Kong for less than 400 yuan ($56).

Official figures also pointed to a rise in road trips, with the holiday seeing an average of 304 million trips per day, mostly by car.

“The Golden Week unleashed a wave of energy across China: record-breaking travel, booming business activity, and fresh spending trends all gave domestic demand a solid boost,” said Bruce Pang, adjunct associate professor at CUHK Business School.

“Still, it might take a while before the [consumer price index] returns to positive [year-on-year] growth, as food prices and oil prices remain soft compared to their peak,” he said.

China’s official consumer prices fell by 0.4% in August from a year earlier but rose 0.9% when stripping out food and energy prices. The tourism sub-segment saw prices rise 0.7% year over year in August, but they were 0.3% lower for the January to August period compared with the same period in 2024.

Travel platforms also reported increased demand in smaller cities, where prices can be far lower. Chinese booking site Tongcheng said hotel bookings in at least 30 such cities and less developed areas more than doubled from a year ago.

China’s inflation data for September is due Oct. 15, and retail sales on Oct. 20. Retail sales rose just 3.4% in August from a year ago, missing analysts’ expectations. 

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Private Credit Expansion and Regulatory Oversight in 2026 Capital Markets

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5 days ago

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August 9, 2026

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The global private credit market has solidified its role as a fundamental pillar of enterprise finance, expanding rapidly across middle-market lending, asset-backed finance, and infrastructure financing. As non-bank financial institutions capture a larger share of corporate debt origination, global regulatory bodies are increasing oversight to evaluate market transparency and systemic risk interconnections.

Growth Drivers in Direct Lending
Direct lending platforms have continued to attract substantial institutional allocations from pension funds, sovereign wealth entities, and insurance companies seeking attractive risk-adjusted yields. Private debt funds offer corporate borrowers customized financing structures, faster execution timelines, and confidentiality compared to syndicated loan markets.

In 2026, private credit managers are increasingly financing larger corporate transactions, providing multi-billion-dollar credit facilities for buyout deals and corporate restructurings. The flexibility of private debt contracts—featuring unitranche pricing and tailored covenant packages—has made direct lending the preferred capital source for middle-market enterprise sponsors.

Regulatory Scrutiny and Systemic Risk Assessment
The rapid growth of non-bank intermediation has drawn heightened scrutiny from financial regulators in North America and Europe. Because private debt agreements are negotiated privately without public exchange disclosures, central banks are evaluating potential vulnerabilities related to asset valuation consistency and fund liquidity profiles.

Regulatory agencies are introducing guidelines aimed at improving reporting standards for private investment vehicles managing institutional assets. Key focus areas include monitoring leverage ratios within private credit funds and evaluating indirect credit exposures between commercial banking institutions and private debt funds.

Navigating Elevated Refinancing Costs
With benchmark interest rates remaining elevated, private debt borrowers face higher debt service obligations on floating-rate credit facilities. Financial advisory firms report an increase in proactive liability management strategies, including payment-in-kind (PIK) interest options, equity infusions from sponsors, and covenant modifications.

Private credit managers with deep operational capabilities are actively working alongside portfolio companies to optimize working capital and maintain cash flow coverage ratios during periods of higher borrowing costs.

Key Financial Takeaways
1. Mainstream Asset Class: Private credit has expanded beyond niche alternative asset status into a core corporate finance solution.
2. Enhanced Transparency Standards: Regulatory frameworks are evolving toward greater disclosure requirements for private debt managers.
3. Proactive Risk Management: Lenders and sponsors must prioritize debt sustainability and active portfolio monitoring amid high benchmark rates.

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Finance

Venture Capital and Startup Valuations in 2026: Focus on Unit Economics and Sustainable Growth

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1 week ago

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August 5, 2026

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The global venture capital (VC) ecosystem is operating under a disciplined investment framework in 2026. Following years of valuation adjustments and shifting liquidity environments, venture capital firms and private equity investors are prioritizing proven unit economics, positive cash flow pathways, and capital efficiency over rapid, unconstrained user acquisition.

The Shift Toward Disciplined Startup Valuations
Early-stage and growth-stage startup valuations have stabilized at sustainable historical averages. Venture capital partners are conducting rigorous due diligence processes before deploying capital, scrutinizing gross margins, customer acquisition costs (CAC), net revenue retention (NRR), and lifetime value (LTV) metrics.

While total capital deployed remains robust, seed and Series A funding rounds are taking longer to finalize. Founders are expected to demonstrate clear product-market fit and defensible intellectual property rather than relying on top-line revenue projections unsupported by strong underlying economics.

M&A Activity and Liquidity Solutions
The market for venture-backed exits is seeing renewed momentum through strategic mergers and acquisitions (M&A) and secondary market liquidity facilities. Established corporate enterprises are acquiring high-performing technology startups to integrate proprietary artificial intelligence models and specialized software solutions into their product ecosystems.

Simultaneously, secondary market transactions have become an essential liquidity mechanism for early employees and institutional investors. Specialized secondary funds are purchasing pre-IPO shares at discounted valuations, providing liquidity opportunities while companies remain private for longer durations.

Sector Allocation: Deep Tech, Clean Energy, and Enterprise Automation
Venture capital investment is heavily concentrated in deep technology and capital-intensive engineering sectors. High-growth investment themes include:
– Next-Generation Semiconductors: Hardware startups designing specialized AI processors and energy-efficient microchip architectures.
– Clean Technology: Battery chemistry innovations, carbon capture solutions, and grid-scale energy storage startups.
– Enterprise Process Automation: Software platforms that automate complex workflows in healthcare, financial services, and industrial logistics.

Key Insights for Entrepreneurs and Investors
1. Prioritize Capital Efficiency: Startups focused on achieving operational profitability receive higher valuation premiums from institutional investors.
2. Strategic Exit Planning: Corporate M&A is serving as a primary exit route for venture-backed startups navigating prolonged IPO windows.
3. Focus on High-Moat Technologies: Deep tech and proprietary software architectures are securing the majority of growth-stage capital allocations.

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Finance

The Evolution of Digital Payments: Cross-Border Settlement and Central Bank Digital Currencies in 2026

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1 week ago

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August 5, 2026

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The infrastructure supporting global commerce is undergoing a major technological upgrade as real-time digital payment rails, cross-border settlement solutions, and Central Bank Digital Currency (CBDC) pilot programs achieve widespread commercial adoption. Financial institutions and fintech developers are reimagining payment processing to eliminate friction, lower transaction fees, and accelerate settlement speed.

Transforming Cross-Border Settlement Infrastructure
For decades, international corporate payments relied on legacy correspondent banking networks characterized by multi-day settlement delays, opaque fee structures, and high foreign exchange markups. In 2026, modern cross-border payment networks are enabling near-instantaneous settlement for international trade transactions.

Financial technology platforms are leveraging distributed ledger technology and real-time gross settlement (RTGS) interconnections to settle transactions in seconds. International trade participants benefit from reduced working capital requirements and minimized foreign exchange volatility risks during cross-border transfers.

Commercial Expansion of Central Bank Digital Currencies
Central banks representing major global economies are advancing CBDC initiatives from research phases into active commercial deployment. Wholesale CBDCs—designed specifically for interbank settlement and financial institution clearing—are demonstrating substantial efficiency gains in domestic and international transactions.

At the retail level, several nations have introduced public digital currency options alongside existing commercial banking networks. These sovereign digital payment channels aim to expand financial inclusion, lower consumer transaction fees, and improve the efficiency of government-to-citizen financial disbursements.

Open Banking and Embedded Finance Ecosystems
Alongside settlement infrastructure upgrades, open banking regulations and embedded finance frameworks are transforming merchant-consumer interactions. Commercial businesses across retail, travel, and business-to-business (B2B) services are integrating seamless payment APIs directly into their customer software interfaces.

Through open banking frameworks, consumers can initiate secure bank-to-bank payments without relying on traditional credit card networks, significantly reducing merchant processing fees. Integrated Buy-Now-Pay-Later (BNPL) options and point-of-sale credit facilities continue to expand, driving higher conversion rates for digital commerce platforms.

Strategic Financial Takeaways
1. Treasury Optimization: Corporate treasurers should leverage instant cross-border payment platforms to minimize liquidity buffers and foreign exchange exposure.
2. CBDC Integration: Financial institutions must prepare internal core banking systems to interface with emerging wholesale CBDC payment rails.
3. Merchant Fee Reduction: Enterprise merchants can lower payment processing overhead by adopting account-to-account (A2A) open banking checkout solutions.

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