BEIJING (BLOOMBERG) – The seaside city of Beihai is emerging from a month-long lockdown that derailed its peak tourism season, a likely indicator of what’s in store for China’s travel sector as other summer vacation hotspots struggle to get outbreaks under control.

The city in the southern region of Guangxi lifted restrictions on Tuesday (Aug 16) as cases ebbed. Authorities had imposed the lockdown of most of Beihai without warning in mid-July, stranding 20,000 tourists and sparking a surge of travel cancellations.

The turmoil was repeated less than a month later in the tropical island of Hainan that’s emerged as China’s biggest source of infections. More than 150,000 tourists were stranded by a lockdown and a dearth of flights, with some stuck in their hotels for more than a week except to buy necessities and undertake the copious number of tests required.

More than 92,000 travellers have been impacted by restrictions in Xinjiang, according to state media, while curbs in Tibet have also thrown holidaymakers’ plans into disarray.

The disruptions deal a blow to what had been a bright spot for an economy ailing under the strictures of Covid-zero. The domestic tourism industry had been booming as overseas travel remains difficult, but the current outbreaks and lockdowns mean China’s top destinations are losing peak vacation spending at a time when consumer sentiment is already weaker-than-expected.

The hit to sentiment may pressure consumption, according to Bloomberg Intelligence Chief Asia Economist Chang Shu, who pointed to an outbreak in Nanjing last summer that was associated with a notable deceleration in retail sales. The Hainan flareup could make people more cautious in their daily lives and cut back on non-essential activity, damping spending, she wrote.

China reported 2,888 cases for Tuesday, up from 2,368 on Monday. The majority of infections were from Hainan, which had 1,663, while Tibet had 686 new infections.

Officials in Hainan said in a briefing on Tuesday that while case numbers remain high, the proportion of those found outside of the quarantine system has been dropping. Zero community transmission is typically a key benchmark for when Covid-19 curbs begin to be lifted.