China Transport, Leisure and Beauty: Virtual tour takeaways: Finding growth in a tougher environment

Ahead of Golden Week, UBS hosted a virtual tour across China transport, leisure and beauty, comprising 10 expert and company meetings, with this report summarising the key takeaways. In leisure, the expert is cautious on the hotel segment: sample hotel RevPAR improved modestly YoY in July-August, led by prime locations and leading brands, while lower-tier cities remained pressured by supply growth and same-brand cannibalisation. Shanghai Airport duty-free sales continued to recover, with CDF outpacing Dufry, and inbound stores' share surpassed outbound stores for the first time, becoming a new growth driver; beauty remains the largest duty-free category. In cargo, air freight volume growth has slowed and the Q4 e-commerce peak is unlikely to replicate prior elevated rates, while AI hardware cargo is growing rapidly and concentrated in the Yangtze River Delta and South China. Express delivery saw regulatory-driven price hikes in Yiwu, though franchisees remain loss-making;