Chinese hotel rates drops opposite increasing demand

Travel News 30 Mar 2017

Mainland China’s hotel industry posted a mixed set of results in November 2016, as performances varied across the country’s different markets.

According to the latest data from STR, nationwide occupancy increased 5.1% to 69.9% last month. This followed an 8.6% jump in demand for hotel rooms, which significantly outpaced a 3.3% expansion of room supply.

Despite this imbalance however, China’s average daily rate (ADR) decreased 1.2% to CNY543.31 (approx. US$78). STR noted that performances varied across the country, with key markets such as Shanghai, Beijing, Nanjing, Guangzhou, Hangzhou and Sanya all seeing growth, and smaller markets such as Kunming and Haikou declining.

Regional economic issues and strong supply growth in second and third tier cities are said to be impacting certain markets.

China’s absolute hotel performance remains lower than the Asia Pacific average. The country’s revenue per available room (revPAR) was approximately US$55 in November, compared to the regional average of US$73. In cities like Singapore however, revPAR rises to around US$150.