Page 386 - 2021 White Paper
P. 386
1 White Paper on the Business Environment in China
health authorities are guiding the cruise industry owner confidence in the market, it also means
on the appropriate pathway to a restart. Before there are many more open hotel rooms counting
the pandemic emerged, cruise tourism was the toward occupancy figures during low-demand
travel industry's fastest-growing sector. Demand periods like the Mid-Autumn festival. While
for cruises has risen in recent years. In 2017, finalized hotel data for the week isn’t public as
some 26.7 million people went on a cruise. The of this writing, early tourist spending data shows
number rose to 28.5 million in 2018 and had Golden Week 2020 was still a success even if it
been expected to reach 32 million in 2020. That, overlapped with another holiday. Duty-free sales
obviously, did not happen. Still, cruise travelers in the leisure Hainan Province were up nearly
tend to be repeat customers, with 82% likely to 150% from 2019. China is still pacing significantly
book a cruise again for their next vacation (Chen). better than other parts of the world like the US
in terms of a hotel recovery. While China’s travel
Hotels and Accommodations economy continues to outperform the world due
to its containing the virus and a strong domestic
After the resumption of trans-provincial group travel base, it still faces occupancy issues in bigger
tours in April 2020, hotels and homestays across cities due to so much of the supply targeting
China saw reservations surge following a long foreign travelers. High-end international hotels
period of bleak earnings due to the COVID-19 with large convention facilities, particularly in the
pandemic. Data from Chinese travel service tier-1 cities such as, Guangzhou and Shenzhen will
provider Ctrip showed that between July 21-30, continue to face challenges while modern hotels
the number of hotel check-ins had significantly in the mid- to upper-midscale segment geared
increased compared with the same period of June. towards the domestic market — particularly in
Hotels in traditional holiday destinations such as leisure destinations — are expected to perform
Hainan, Yunan and Sichuan saw increased check- very well (Sperance).
in rates during the summer vacation. Business
insiders forecast that hotels will continue to see According to the latest China Construction
an increase in reservations into 2021. With the Pipeline Trend Report, analysts at Lodging
recovery of hotels, the homestay business has Econometrics (LE) reported that, China's total hotel
also joined the market competition (Yuan). construction pipeline continues to trend upward
to an all-time high of 3,574 projects/647,704
China continues to be the hotel industry’s rooms. Up 19% by projects and 9% by rooms
biggest pandemic recovery success story, as year-over-year. China has 2,282 projects/408,403
companies like Marriott anticipate revenue there rooms presently under construction. Projects
could be back to 2019 levels as early as 2021. scheduled to start construction before July 2021
While China’s hotel occupancy recovery still shows experienced a massive increase of 105% by
signs of occasional volatility, experts aren’t as projects and 57% by rooms YOY, to stand at a
concerned with the rare drop-off in numbers in record-high 842 projects/132,469 rooms. New
China as in other parts of the world. Occupancy highs can be attributed to the announcement
is not that bad considering what’s going on right of a record number of new upper midscale and
now. Hotel occupancy rates in China were just midscale projects into the pipeline as well as delays
shy of 60% in early October 2020. That’s down in new construction projects that were announced
more than 13% from the same time in 2019 — a in the second half of 2019 and were stalled at
notable drop from the average being only about the beginning of 2020 due to COVID-19. These
4% off 2019 occupancy figures for the last 28 days. projects are expected to advance over the next few
The supply explanation for the occupancy dip is quarters as construction in China has resumed.
that more hoteliers are confident in how China Projects in the early planning stage stand at 450
is performing. The room supply in China today is projects/106,832 rooms, up 11% by projects and
about 7% off from 2019 levels. Roughly 35% of the 6% by rooms YOY. In the second quarter of 2020,
room supply was offline during the worst of the China only opened 101 new hotels with a record-
pandemic in China. While that shows more hotel low number of rooms totaling 14,150. Guangzhou
leads China's pipeline with 140 projects, a record-
386
health authorities are guiding the cruise industry owner confidence in the market, it also means
on the appropriate pathway to a restart. Before there are many more open hotel rooms counting
the pandemic emerged, cruise tourism was the toward occupancy figures during low-demand
travel industry's fastest-growing sector. Demand periods like the Mid-Autumn festival. While
for cruises has risen in recent years. In 2017, finalized hotel data for the week isn’t public as
some 26.7 million people went on a cruise. The of this writing, early tourist spending data shows
number rose to 28.5 million in 2018 and had Golden Week 2020 was still a success even if it
been expected to reach 32 million in 2020. That, overlapped with another holiday. Duty-free sales
obviously, did not happen. Still, cruise travelers in the leisure Hainan Province were up nearly
tend to be repeat customers, with 82% likely to 150% from 2019. China is still pacing significantly
book a cruise again for their next vacation (Chen). better than other parts of the world like the US
in terms of a hotel recovery. While China’s travel
Hotels and Accommodations economy continues to outperform the world due
to its containing the virus and a strong domestic
After the resumption of trans-provincial group travel base, it still faces occupancy issues in bigger
tours in April 2020, hotels and homestays across cities due to so much of the supply targeting
China saw reservations surge following a long foreign travelers. High-end international hotels
period of bleak earnings due to the COVID-19 with large convention facilities, particularly in the
pandemic. Data from Chinese travel service tier-1 cities such as, Guangzhou and Shenzhen will
provider Ctrip showed that between July 21-30, continue to face challenges while modern hotels
the number of hotel check-ins had significantly in the mid- to upper-midscale segment geared
increased compared with the same period of June. towards the domestic market — particularly in
Hotels in traditional holiday destinations such as leisure destinations — are expected to perform
Hainan, Yunan and Sichuan saw increased check- very well (Sperance).
in rates during the summer vacation. Business
insiders forecast that hotels will continue to see According to the latest China Construction
an increase in reservations into 2021. With the Pipeline Trend Report, analysts at Lodging
recovery of hotels, the homestay business has Econometrics (LE) reported that, China's total hotel
also joined the market competition (Yuan). construction pipeline continues to trend upward
to an all-time high of 3,574 projects/647,704
China continues to be the hotel industry’s rooms. Up 19% by projects and 9% by rooms
biggest pandemic recovery success story, as year-over-year. China has 2,282 projects/408,403
companies like Marriott anticipate revenue there rooms presently under construction. Projects
could be back to 2019 levels as early as 2021. scheduled to start construction before July 2021
While China’s hotel occupancy recovery still shows experienced a massive increase of 105% by
signs of occasional volatility, experts aren’t as projects and 57% by rooms YOY, to stand at a
concerned with the rare drop-off in numbers in record-high 842 projects/132,469 rooms. New
China as in other parts of the world. Occupancy highs can be attributed to the announcement
is not that bad considering what’s going on right of a record number of new upper midscale and
now. Hotel occupancy rates in China were just midscale projects into the pipeline as well as delays
shy of 60% in early October 2020. That’s down in new construction projects that were announced
more than 13% from the same time in 2019 — a in the second half of 2019 and were stalled at
notable drop from the average being only about the beginning of 2020 due to COVID-19. These
4% off 2019 occupancy figures for the last 28 days. projects are expected to advance over the next few
The supply explanation for the occupancy dip is quarters as construction in China has resumed.
that more hoteliers are confident in how China Projects in the early planning stage stand at 450
is performing. The room supply in China today is projects/106,832 rooms, up 11% by projects and
about 7% off from 2019 levels. Roughly 35% of the 6% by rooms YOY. In the second quarter of 2020,
room supply was offline during the worst of the China only opened 101 new hotels with a record-
pandemic in China. While that shows more hotel low number of rooms totaling 14,150. Guangzhou
leads China's pipeline with 140 projects, a record-
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