Mainland China Hotel Industry shows Early Signs of Performance Recovery

STR shows that 87 per cent of the hotels in its Mainland China sample are now open after many had closed over the last two months.

According to preliminary data from STR, Mainland China’s daily hotel occupancy reached an absolute level of 31.8 per cent on 28 March, up from a low of 7.4 per cent during the first week of February. Additionally, opening rates have been significant in key markets across the region.
 
In Beijing, daily occupancy sat around 10per cent for most of the first week of March, but climbed to as high as 21.6 per cent on 28 March. Shanghai was as low as 11.0 per cent on 1 March but reached 28.6 pert cent on 28 March. Among the key STR-defined markets for Mainland China, the highest absolute occupancy levels have been seen in Xi’an (35.9 per cent on 28 March) and Chengdu (35.6 per cent on 28 March).

Christine Liu, STR’s regional manager for North Asia said, “We’re seeing green shoots in hotel occupancy figures, but we must stress that these are only early signs of a recovery that is likely to develop slowly. Some of the demand stems from corporate travel, primarily within the same province, as well as small-scale meetings. Additionally, hotels are seeing business from those travelers quarantined after returning to China from other countries as well as those returning to cities for work. Overall, we’re seeing limited leisure business in city centers but a bit more recovery in that segment in surrounding suburbs.”

“Xi’an captured business from South Korea because of Samsung’s manufacturing factory in the tech zone—expatriates were able to relocate their families to Xi’an when the outbreak hit South Korea. Additionally, Xi’an is one of the redirect destinations for inbound flights scheduled to land in Beijing," Liu added.

The occupancy trend line in Wuhan has taken a much different path. Occupancy in the city fell to as low as 7.5 per cent on 23 January, jumped to a high of 72.7 per cent on 7 March, and has since trended downward to 62.4 per cent on 28 March.

Another positive for the industry, STR shows that 87 per cent of the hotels in its Mainland China sample are now open after many had closed over the last two months.

Liu stated, “Wuhan saw an influx of hotel demand as medical workers entered the market, but some of that demand has tailed off as the situation becomes more stable.”

 



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