18 Oct 2011
Greater China Hotel Report 1H 2011
Overview
2010 marked the end of a correction and the start of a recovery for China’s hotel market. Hotel demand—hit by the global financial crisis and natural disasters in the country in 2008—has been picking up since 2010 as the number of tourist arrivals started growing again. Other market indicators also displayed encouraging signs: hotel average daily rates (ADR) grew an average of 10.5% last year. In major cities such as Beijing, Shanghai and Guangzhou, revenue per available room rose 34.9% in 2010. Fivestar hotel occupancy crept back to above the 60% level.
In 2010, the total number of overnight visitors reached 55.7 million across China, up 9.4% from the previous year. Domestic tourists remained dominant, accounting for over 60% of total visitor arrivals and reaching 17.1 million in 2010. The uptrend has been maintained so far in 2011, with the number of overnight visitors increasing 1.1% year on year in the first half of this year.
Meanwhile, tourism receipts increased 21.6% in 2010. Domestic tourism receipts—which accounted for 80.2% of total tourism receipts in 2010—grew 23.5%, compared with a more moderate increase of 14.4% in foreign receipts.
Demand and supply
In the first half of 2011, hotel operators continued to strengthen their foothold in the Greater China region. Among the five cities covered by this report, Macau was the most active market in the first half of 2011, where three large-scale, five-star hotels were completed in the period, providing over 4,000 rooms. Five hotels also opened in Shanghai, adding over 2,000 rooms to the city’s five-star hotel room stock, while hotel expansions in Beijing and Hong Kong were comparatively less aggressive during the period.
The ADR in all five major cities rebounded after the global economic downturn. Thanks to Expo 2010 Shanghai China, Shanghai experienced the largest year-on-year growth among the cities in 2010, with ADR gaining 12.9%, followed by Guangzhou, Hong Kong and Beijing with growth of 10.2%, 8.7% and 8.4%, respectively. Since Macau’s hotel market was not severely impacted by the financial crisis in 2009, its ADR increased only 4.0% in 2010.
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