China's Guosen Securities released a research report stating that the extended Spring Festival holiday is conducive for the public to make reasonable arrangements for family visits and travel. Referring to the 2024 Spring Festival, the multi-segment itinerary of "returning home + tourism" extends the peak travel period. At the same time, holiday optimization helps urban office workers to better arrange their leave, leading to increased mid-to-long distance travel and flexible off-peak travel. Overall, the new holiday arrangements actively respond to the public's call for optimizing holiday schedules and also demonstrate the country's focus on boosting domestic consumption. It is expected to actively drive the related travel industry chain and local consumption.

Subject:

1. On November 12, 2024, the State Council issued a decision to amend the "National Holidays and Memorial Days Holiday Regulations", starting from 2025, all citizens will have an additional 2 days off, with 1 extra day for both the Spring Festival and Labor Day; they can arrange unified holidays and breaks reasonably, in combination with implementing paid annual leave and other systems to form longer actual vacation periods. Except for certain special circumstances, the statutory holidays generally do not exceed 6 consecutive working days before or after the holidays.

2. The General Office of the State Council issued a notice on the holiday arrangements for 2025, where New Year's Day will have a day off, Spring Festival will have an 8-day holiday and 2 days off, Qingming Festival and Dragon Boat Festival will have a 3-day extended weekend holiday, Labor Day will have a 5-day holiday and 1 day off, and National Day and Mid-Autumn Festival will be combined for an 8-day holiday and 2 days off.

Guosen Securities' main points are as follows:

China's holiday system has been gradually optimized in response to changes in the economic and social environment. Starting from 2025, the statutory holidays will increase to 13 days.

Since 1995, china has implemented the weekend system; in 1999, it implemented the golden week system; in 2008, in order to promote traditional chinese culture, may day was changed to a short holiday, and new holidays were added for qingming, dragon boat festival, and mid-autumn festival, increasing the total number of days off from 10 to 11; starting from 2014, the spring festival golden week was changed to start on the first day of the lunar new year; at the same time, holidays that fall on wednesdays no longer have adjusted workdays, instead, adjustments are made for tuesdays and thursdays; in 2020, may day was extended from 3 to 5 days through workday adjustments; starting from 2025, statutory holidays will be increased to 13 days, with new year's eve being included as a day off again and reducing one day off for may day, at the same time, it is specified that apart from particular circumstances, the general work period before and after statutory holidays does not exceed 6 consecutive days.

Starting from 2023, the holiday consumption peak season will be even stronger, and optimizing holidays has practical significance for expanding domestic demand.

Due to changes in the external environment, family consumption is more focused on parent-child activities, while individuals use holidays for leisure travel to pursue mental relaxation. In 2023, the number of travelers during holidays in china after may day has exceeded the levels of the same period in 2019, with holiday trips accounting for 33% of the total annual trips, a significant increase from about 27% in 2019, it is expected that the trend of "peak season getting even stronger" will continue. After a 17-year interval, the extension of statutory holidays currently has practical significance in the consumption environment, also serving as a manifestation of the country prioritizing the service industry as an important means of expanding domestic demand, helping to enhance market expectations for further intensification of policies to boost domestic demand.

The extension of the spring festival holiday is expected to solidify multi-segment travel patterns, while reducing may day breaks is beneficial for working individuals to conveniently plan long-distance trips.

In the past, the spring festival holiday lasted 7 days, with a possibility of extending to 8 days when chinese new year's eve falls on a friday (e.g. in 2024); starting from 2025, the spring festival holiday will be extended to 8 days, and when new year's eve falls on a friday, it can be extended to 9 days (e.g. in 2027). The extension of the spring festival holiday is beneficial for the public to reasonably arrange family visits and travel, as observed in the multiple-stage "return home + travel" itinerary pattern during the 2024 spring festival that caused an extended travel peak. In addition, holiday optimization facilitates convenient planning for working individuals to take time off, thereby driving mid-to-long-distance travel and flexible off-peak travel.

Investment advice:

Balancing certainty and cyclical factors, it is recommended in the short term to invest in companies such as ctrip group-S (09961), meituan-W (03690), yum china (09987), haidilao (06862), changbai mountain tourism (603099.SH), emei shan tourism (000888.SZ), tongchengtravel (00780), h world group-S (01179), btg hotels (600258.SH), and others.

Risk Warning: Systemic risks such as macroeconomic, political, and economic changes, policy risks, weaker-than-expected consumption recovery, intensified industry competition, and underperformance of heavy asset new projects.