Zhang Wei from Caitong Securities: Each generation has its own consumption patterns

Core Viewpoints This year's National Day and Mid-Autumn Festival holiday sees a coexistence of "budget travel" and "relaxation": During this long holiday, the improvement in domestic tourism data relies on two factors: longer holidays and more tourists, while individual residents' spending on domestic travel has actually decreased. Cultural and tourism consumption seems to be in a state of "budget travel" and "downgrading." However, contrary to the "consumption downgrade" reflected in domestic data, the significant growth in outbound tourism seems to point towards "consumption upgrading." Chinese consumers are becoming more relaxed in service consumption—people are more willing to "pay for comfort," and more willing to "travel at a moment's notice," with "experience" replacing "special forces tourism." Each generation has its own consumption patterns: The structural transformation of holiday consumption cannot be separated from intergenerational changes in the population. This year's National Day and Mid-Autumn Festival holiday saw young people leading the marginal changes in consumption. The emergence of Generation Z, born between 1995 and 2009, into society may be one reason for the change in consumption structure. Experience, self-pleasure, and healing are the consumption characteristics of Generation Z. The real estate sector may also be a reason for the more relaxed cultural and tourism consumption. The reversal of real estate's impact on consumption corresponds to the generational shift from Generation Y to Generation Z. The average age for first-time homebuyers in China is 27. Normally, those born in 1995 and later in Generation Z may not become first-time homebuyers until 2022. The reversal of housing price trends and expectations in mid-2021 means that most of Generation Z may not have purchased homes by now, so their willingness to consume has not been impacted by falling housing prices; rather, they have benefited from it. The relaxed enjoy the world first: Consumption should not only be viewed in terms of total volume but also in terms of structural changes. Baijiu (Chinese liquor) and real estate once represented China's consumption level at certain stages, but the representation of Chinese consumption has never solely been about baijiu and real estate, nor will it always be. As the more relaxed Generation Z and younger individuals further become the mainstream of society, their consumption characteristics will provide greater marginal impetus for the structural transformation of Chinese consumption. Moreover, without the long-term worries about housing prices, people can better meet their current material and emotional needs, which is also a facet of the transformation in consumption structure. We believe that as long as the structure of consumption demand can continue to transform, and the high-quality cultural and tourism supply in the domestic market can timely match the changes in demand, there will still be an increasing number of Chinese people willing to pay for "relaxation." 01 "Budget Travel" and "Relaxation" Coexist The tourism data for this year's National Day and Mid-Autumn Festival holiday is somewhat "strange." Domestic tourism consumption seems to be deteriorating. According to data from the Ministry of Culture and Tourism, during the 8-day National Day and Mid-Autumn Festival holiday this year, there were 888 million domestic trips, with total domestic travel spending reaching 809 billion yuan, representing increases of 16.1% and 15.4% respectively compared to the same period in 2024, indicating a considerable growth in total domestic tourism consumption However, this year, due to the merging of the National Day and Mid-Autumn Festival holidays, the holiday is one day longer than last year. When converted to daily average consumption, the domestic daily average travel reached 111 million person-times, with total spending of 101.126 billion yuan, showing a year-on-year growth rate of 1.6% and 1.0% respectively compared to 2024. The performance of per capita consumption is even weaker. During the 2025 National Day and Mid-Autumn Festival holiday, the per capita spending for domestic travel was 911.0 yuan, a decrease of 0.6% compared to 916.1 yuan during the same period in 2024. In other words, during this long holiday, the improvement in domestic tourism data relies on a longer holiday and more tourists, while individual residents' spending on domestic travel has actually decreased, suggesting that cultural and tourism consumption seems to be in a state of "budget travel" and "downgrading." However, some consumption data outside the traditional perspective has shown unexpectedly strong performance. In contrast to the "consumption downgrade" reflected in domestic data, the significant growth in outbound tourism seems to indicate "consumption upgrade." According to statistics from major travel platforms, during this year's National Day and Mid-Autumn Festival holiday, the order volume for outbound group travel increased by more than 20% compared to the same period last year (Meituan Travel, "2025 National Day and Mid-Autumn Festival Travel Summary Report"), with long-distance outbound group travel nearly doubling year-on-year (Tongcheng Travel, "2025 National Day and Mid-Autumn Festival Travel Consumption Report"); bookings for popular outbound destinations increased by 30% year-on-year (Qunar Travel, "2025 National Day and Mid-Autumn Festival Travel Data Report"); and tourist footprints covered over 180 countries and regions, a significant increase compared to last year (Fliggy, "2025 National Day and Mid-Autumn Festival Travel Briefing"). Coincidentally, domestic high-end consumption represented by duty-free products is also recovering. During this year's National Day and Mid-Autumn Festival holiday, Haikou Customs reported a duty-free amount of 944 million yuan, with 122,900 shoppers and an average shopping amount of 7,685 yuan, representing year-on-year increases of 13.6%, 3.2%, and 10% respectively. Behind the contradiction of "consumption downgrade" in domestic travel and "consumption upgrade" in outbound travel and duty-free products, there are objective factors at play. Firstly, time. The arrangement of time may be one of the reasons promoting the recovery of outbound tourism. This year's National Day and Mid-Autumn Festival holiday is not only one day longer than last year, but taking three days off allows for a continuous 12-day break, providing a time foundation for longer outbound travel Second is space. The Ministry of Culture and Tourism statistics focus on domestic tourism data, and this year there is a clear structural differentiation in domestic tourism space—small cities have become the travel choice for more people. Data from TONGCHENGTRAVEL shows that during this holiday, the booking popularity of high-quality hotels in non-first-tier cities increased by 90% year-on-year, higher than the overall booking popularity of high-quality hotels in the country; more than 30 district and county destination hotels saw booking popularity increase by over 100% year-on-year. A report from Feizhu also pointed out that orders from domestic third-tier cities and below grew strongly. The cost of living in small cities is usually lower than in large cities, and the expenses for outbound travel are not included in the Ministry of Culture and Tourism's data, so the structural differentiation in space may also be one of the reasons for the decline in per capita spending on domestic travel during this holiday. Therefore, it may be biased to assert that cultural and tourism consumption is weakening solely based on the decline in domestic per capita spending. Beyond objective factors, the changes in consumer mentality reflected in this holiday's travel data are more worthy of attention—Chinese consumers are becoming more relaxed in service consumption. Despite ongoing downward pressure on the economy, the willingness to spend more money and time traveling abroad itself reflects a greater willingness to pay for pleasure and leisure, especially with more choices of niche travel destinations rather than traditional classic ones. Moreover, there are sufficient marginal changes in travel methods, with "experience" replacing "special forces tourism": People are more willing to pay for "comfort." Data from Ctrip shows that during the National Day and Mid-Autumn Festival holiday, orders for scenic spots with elevators and cable cars that facilitate painless mountain climbing, such as Taizhou's Xianxianju, Mangshan Wuzhifeng, and Ningbo's Lingyan, increased by 20%-100%+; orders for outbound charter services increased by 120% year-on-year. TONGCHENGTRAVEL data indicates that among first-time airplane passengers, the number of users booking domestic first-class and business class increased by over 10% year-on-year, with first-time passengers placing more emphasis on flight comfort and experience. People are more willing to "travel at a moment's notice." Data from Meituan Travel shows that 58.3% of users prefer to book travel products on the same day. 02 A generation has its own consumption The structural transformation of holiday consumption is inseparable from the generational changes in the population. "A generation has its own mission, a generation has its own responsibility," and a generation also has its own consumption. This year, during the National Day and Mid-Autumn Festival holiday, young people led the marginal changes in consumption. Data from Feizhu shows that during this holiday, those born between 1995-1999 (26-30 years old) accounted for the highest proportion of bookings, reaching nearly a quarter; the number of bookings from those born after 2005 increased by 61% year-on-year, with the fastest growth rate; university student flight bookings increased by 63%, with international flight bookings increasing by 110% year-on-year. Data from Qunar Travel shows that during this holiday, the increase in first-time purchases of outbound flight tickets among those aged 13-17 (born between 2008-2012) reached 63%, leading all age groups; among those purchasing outbound flight tickets, 39% were aged 23-30 (born between 1995-2002), the highest among all age groups, followed by 30% aged 31-40 (born between 1985-1994) According to data from TONGCHENGTRAVEL, during this holiday, the student group accounted for nearly 40% of the domestic flight passenger base, making it the largest customer group. The emergence of Generation Z, born between 1995 and 2009, entering society may be one of the reasons for the change in consumption structure. Experience, self-pleasure, and healing are the consumption characteristics of Generation Z young people. According to the 2023 consumer survey report by Boston Consulting Group - "Intergenerational Changes in Chinese Consumers," Generation Z shows significant independence and a return to hedonism compared to Generation X (born 1965-1979) and Generation Y (born 1980-1994). They place more emphasis on the basic functions of products/services during consumption; additionally, Generation Z rejects the concept of "involution," seeks enjoyment, and needs to relieve stress, gaining healing energy and emotional release. Therefore, services and products that combine experiential and healing aspects, such as travel, trendy toys, and sports events, are becoming the choices of Generation Z. In addition to the consumption characteristics conferred by the development of the times, real estate, as a pillar industry in China, may also be a reason for the more relaxed cultural and tourism consumption. When discussing consumption in China, one cannot ignore real estate. Real estate is a double-edged sword for consumption, as its wealth effect and income effect often have opposing impacts on consumption. During the phase of rising housing prices, the positive impact of real estate on consumption manifests in two aspects: First, for homeowners, especially those with multiple properties, the expansion of assets creates a positive wealth effect, which in turn stimulates the consumption tendency of homeowners. Second, the continuous upward trend in the real estate industry increases the income levels of related professionals in the real estate chain, thereby driving consumption in this group through the income effect. The negative impact on consumption mainly affects young people who do not own property but need to buy a home. For this group, rising housing prices erode disposable income, and the income effect suppresses consumption. As of August this year, the price of second-hand houses in first-tier cities has decreased by 34.3% compared to the peak in July 2021. For homeowners, the decline in housing prices has led to a significant shrinkage of assets, causing the wealth effect on this group to shift from stimulation to suppression. As of 2020, non-financial assets accounted for approximately 63.1% of the net assets of Chinese households, with real estate being the primary asset of households in China. This has resulted in a significant drag on household consumption during the past four years of declining housing prices. However, for young people who have not yet purchased a home, the decline in housing prices after 2021 has, firstly, reduced the erosion of disposable income by home purchases, allowing for more room for consumption; secondly, the trend and expectation of falling housing prices have also alleviated their anxiety about buying homes. For this group, the decline in housing prices may not only have not suppressed their consumption behavior but may have actually promoted their willingness to consume through the improvement of the income effect. The reversal of the impact of real estate on consumption corresponds to the generational transition between Generation Y and Generation Z. The average age of first-time homebuyers in China is 27 years. Under normal circumstances, those born in 1995 and later, belonging to Generation Z, may only start to become the first-time homebuyer group around 2022. The reversal of housing price trends and expectations in mid-2021 means that most of Generation Z may not have purchased homes by now, and thus their willingness to consume has not been impacted by falling housing prices; rather, they have benefited from it. 03 Relaxed Individuals Enjoy the World First From the travel data during this year's National Day and Mid-Autumn Festival holidays, the generational transition is quietly changing the structure of consumption, with relaxed individuals enjoying the world first. An economy is not a single entity that embodies all consensus but rather the result of different behavioral choices made by various micro-entities. The microstructure of the economy is changing, and the representation of the economy should also change accordingly. Consumption should not only be viewed in terms of total volume but also in terms of structural changes. Baijiu and real estate once represented China's consumption level at certain stages, but the representation of Chinese consumption has never solely been about baijiu and real estate, nor will it always be. Each generation has its own consumption patterns. As the more relaxed Generation Z and younger individuals further become the mainstream of society, their consumption characteristics will provide greater marginal impetus for the structural transformation of Chinese consumption. Moreover, real estate has different impacts on the consumption behavior of different groups. While falling housing prices have indeed led to a contraction of the wealth effect for the "homeowners," they have also brought about an expansion of the income effect for the "non-homeowners." Without the long-term worries about housing prices, people can better meet their current material and emotional needs, which is also a facet of the transformation in consumption structure. Although the economy still faces downward pressure, China is not like Japan in the 1990s; it resembles the United States in the 1970s during a period of structural transformation. The "sense of relaxation" may continue to drive the structural transformation of consumption, so we are not pessimistic about consumption activities related to immediate and emotional satisfaction Indeed, from the travel data of this holiday, the contribution of "relaxation" to consumption is more evident overseas. On one hand, the long holiday arrangement of "3 days off and 12 days off" provides convenience for outbound travel, and the exotic cultures and customs abroad better satisfy the experiential consumption characteristics of the younger generation. However, another important reason is that domestic tourist attractions during holidays often experience overcrowding, which affects the travel experience and comfort. In recent years, China's consumption policies have also been paying more attention to the supply of high-quality service consumption. On September 16, the Ministry of Commerce and nine other departments jointly issued "Several Policy Measures to Expand Service Consumption," proposing the requirement to "enrich the supply of high-quality services and enhance the service supply levels in culture and entertainment, sports, housekeeping, elderly care, and childcare." We believe that as long as the structure of consumption demand can continue to transform, and the domestic high-quality cultural and tourism supply can timely match the changes in demand, there will still be an increasing number of people in the country willing to pay for "relaxation" domestically. Author of this article: Zhang Wei, Source: Zhang Wei & Caitong Business Society, Original Title: "A Generation Has Its Own Consumption (Caitong Macro & Business Society)" Risk Warning and Disclaimer The market has risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Investment based on this is at one's own risk