CITIC Securities: Tourism market booming during the Spring Festival, hotel sector performing better than expected.

Citic Securities research report believes that this year's Spring Festival holiday will be a 9-day consecutive holiday, making it the "longest Spring Festival" in history. Additionally, the temperature during the Spring Festival period is higher, and the overall weather conditions are suitable for travel. The extra-long holiday has led to a trend of "returning home first, then traveling" or multi-destination travel. Hotel prices and quantity are both on the rise, with RevPAR growth exceeding expectations. The duty-free business on islands is booming, with Sanya experiencing better growth than Haikou. Overall, tourist flows at scenic spots are strong, and many scenic spots have announced restrictions on visitor numbers. Looking ahead to 2026, service industry consumption is an important policy direction, with the general travel scene expected to continue benefiting. On the demand side, the trend of K-shaped recovery is expected to continue, with leading companies in the pan-middle-end consumption sector benefiting from low base effects, and outbound demand transitioning from pilot testing to large-scale implementation. On the supply side, normalized supply innovation ensures emotional value premiums, policy guidance plays a positive role, and AI-enabled efficiency improvements and cost optimization are key. Three recommended main themes: high-quality targets in the leisure travel scene; leading companies with stable operations and growth in the pro-cyclical leisure sector; and gambling companies and top beverage brands with high demand elasticity in the recovery of the tourism sector. In addition, pay attention to the implementation of subsequent policy regulation in the OTA sector, and monitor the pace of recovery in business demand and the catalyzation of AI applications in the human resources sector.