China hotel rebound gets boost from holiday travelers
China hotel rebound gets boost from holiday travelers
13 MAY 2020 7:51 AM

China’s early-May Labour Day holiday weekend lifted hotel occupancy in some markets by 10 percentage points or more, according to data from STR.

SINGAPORE—As pandemic fears and restrictions ease in China, the rebound of the country’s hotel industry got a big bounce from the Labour Day holiday over the first days of May, STR data shows.

(STR is the parent company of Hotel News Now.)

In the latest in a series of weekly video insights into Chinese hotel performance, Jesper Palmqvist, area director for the Asia/Pacific region for STR, said the holiday was “quite the supercharger” in terms of hotel occupancy, yielding “levels certainly not seen in a long time.”

A “springboard effect” is evident in the data around the Friday, 1 May, holiday, he said, with absolute occupancy going from 33% on the Thursday before “to the mid-40s (on Friday) and then up close to 50% on the peak day” of 2 May, which is “10 percentage points higher” than recent occupancy.

One of China’s “rebound heroes,” according to the weekly data, was Qiandao Lake, just outside of Hangzhou, where absolute hotel occupancy for the 1-3 May holiday weekend averaged more than 95%.

“On the 2nd of May, (occupancy for the market) was millimeters from 100%,” he said, noting these “extraordinary numbers,” including average daily rates triple what they were the week prior, were driven by “genuine leisure traffic.”

On the island of Hainan, a market which relies more on flights, Sanya in the south reached average occupancy “between 65% and 70% over the peak days of the holiday, while driving ADR 45% higher than what we saw in the week prior,” Palmqvist said.

Hotels in regional areas of the island reported occupancy levels as high as 80%, “albeit with a smaller ADR premium (+20%),” he said.

“Suffice to say Hainan delivered as promised and had a strong weekend to build on,” he said.

Palmqvist pointed to three main drivers of growth across China:

  1. “Travel restrictions can, on the flipside, create local demand influx as in the case of Chongqing.
  2. “While corporate travel is gently coming back, we can see high-end leisure (business) returning with a vengeance as displayed in Suzhou.
  3. “Bearing in mind previous facts about social distancing needs and escapist travel patterns where possible, surrounding areas can by far outperform central districts easily shown recently in Ningbo.”

For more of Palmqvist’s insights into the China hotel industry performance data, watch the video below.

Editor’s note: The video included in this article was filmed by STR’s Jesper Palmqvist on 7 May and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.

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