The downturn in Chinese hotel performance is likely to continue for the foreseeable future, according to a new report by STR Global. But not all agree.
Chinese hotels recorded an average occupancy of 44.9% (compared to 75.3% in Australia, 70.7% in Singapore and 64.2% in India) during February 2009.
STR Global says the situation is being exacerbated by an oversupply of new hotels coming online in China, as well as a significant slowdown in demand for hotel rooms.
BizChinaUpdate reports James Chappell, Managing Director of STR Global, who said, ‘The whole region has been hit hard by the global banking crisis and until December was in a period of sustained growth.
‘China now faces a sharp decline in demand to add to the oversupply.’ China’s average revenue per available room was RMB313.80 in February, down 23.5% year on year.
Yet, strangely, a survey suggests China’s hotels could lead recovery
A senior official from China Tourist Hotels Association (CTHA) said China’s hotels may spearhead the industry in shaking off the economic recession.
A survey based on the performance of 14 major cities’ hotels showed that between September 2008 and January 2009, hotels of all varieties in China were hit by the global economic slowdown compared to the same period in 2007, while hotels managed by international companies felt more of a pinch than their local rivals.
The survey, jointly conducted by CTHA and hotel investment consultancy SAO Hotel Solution Consulting Ltd, revealed that the average occupancy rate of international branded hotels’ plummeted 28% to 45% amid the financial crisis, while domestic hotels had an occupancy rate drop of 17 percent to 60%. This was reported byXu Jingsheng, secretary general with CTHA.
Of the hoteliers polled in the 14 cities, 60% were prudent about prospects for 2009, and another 34% were still full of confidence.
Xu said seasonal consumer spending during the Lunar Chinese New Year holiday has sparked a robust recovery. During the weeklong vacation, 109 million people traveled for sightseeing or visiting relatives, up 24.7 percent year-on-year. And they spent RMB50.9 billion, up 23% over 2008.
China Daily reported Huang Zhengang, secretary general with Shanghai Municipal Tourism Administration, as saying the forthcoming World Expo 2010 Shanghai was estimated as drawing 70 million visitors.
Local tourism promotion activities include Guangdong’s introduction of a citizen tourism scheme, and the distribution of hundreds of millions of RMB worth of travel coupons to tourists in Hangzhou, Chengdu and Nanjing.
‘It is highly probable that China’s tourism industry will get revived first,’ Xu added.