China Recovers Slightly. Demand Tumbles Everywhere Else

Main Photo: Comparative hotel occupancy rates – China v USA v Europe

Date: April 2020

Locations: China and Global

Name: STR weekly webinar

Is Covid-19 Over?:…. No, far from it, but there a chink of light coming from China, where it kinda all started…

Eh: Mainland China’s daily hotel occupancy reached an absolute level of 31.8% on 28 March, up from a low of 7.4% during the first week of February, according to preliminary data from STR.

Additionally, opening rates have been significant in key markets across the region. “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,” said Christine Liu, STR’s regional manager for North Asia.

“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 travellers 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 centrs but a bit more recovery in that segment in surrounding suburbs.”

In Beijing, daily occupancy sat around 10% for most of the first week of March, but climbed to as high as 21.6% on 28 March. Shanghai was as low as 11.0% on 1 March but reached 28.6% 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% on 28 March) and Chengdu (35.6% on 28 March).

“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,” Liu said. “Additionally, Xi’an is one of the redirect destinations for inbound flights scheduled to land in Beijing.”

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

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

Meanwhile from other news sources: Around 4,200 hotels in Shanghai have reopened as coronavirus lockdown restrictions are lifted and the city comes back to life.

The city authorities reported that more than 80 tourist attractions and about 4,200 hotels across Shanghai have reopened, and the city’s cultural and tourism venues have received about 1.7 million visits so far since their reopening. Also back open for visitors are 110 museums and art galleries, and 40 libraries and cultural centres.

Wang Wei, counsel of the Shanghai Culture and Tourism Administration, said: “Shanghai’s cultural and tourism authorities have taken a variety of measures to promote the resumption of cultural and tourism enterprises, and to provide safe, quality cultural products and services for Shanghai residents. The city’s cultural and tourism industry is recovering in an orderly manner and the cultural and tourism consumption market is warming up.”

Meanwhile the rest of the world is still very much in decline and not quite reached bottom yet!

STR data for Rest of the World, courtesy STR

Well done STR for conducting these weekly hotel industry webinars, which are an hour in length and well-worth tuning in for….for details of how to join call us at THPT.

THPT Comment: As might be expected, the recovery in China has started with domestic business and family travel, including quarantined guests at airport hotels, hence impacting largely on the budget class hotels. We are all holding our breath to see if this is a temporary upward blip, or the pre-cursor to the second wave!

The big question in our mind is what will the (business travel) world look like post recovery? Will we get used to not travelling, conducting business via the multitude of face-to-screen online tools, working from home? Watch this space….

First Seen: STR weekly webinar

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