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Golden Week 2019 - China Hotel Market Data

The comprehensive promotion of national tourism policies throughout China has undoubtedly provided a strong impetus for the development of the hotel industry. Golden Week provides an even greater boost to leisure tourism, family holidays and cultural tourism.

According to the Chinese Ministry of Culture and Tourism, 782 million domestic tourists travelled throughout China during the seven-day National Day Holiday in 2019, a 7.81% increase on the previous year; domestic tourism revenue reached RMB649.71 billion, up 8.47% on the previous year.

On 7 October 2019, there were more than 50 million domestic tourists throughout China, an increase of 8.78% compared with the same period last year. The revenue from domestic tourism on that day reached RMB40.78 billion, an increase of 10.34% (source: Chinese Ministry of Culture and Tourism).

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Golden Week 1

Mainland China

Occupancy rate: STR’s latest October daily data for Mainland China’s hotel industry reports that occupancy during Golden Week fell by 4.5% compared with the same period in 2018. Luxury hotels reported only a slight decline (-1.3%), while the most marked decline in occupancy was seen in Upper Midscale hotels, which recorded a drop of more than 6.0%. A closer look at the daily data reveals that the best performance was recorded from 2-4 October, when the hotel occupancy rate exceeded 80.0%, before falling to just 35.0% on 7 October .

Average Daily Rate (ADR): Overall ADR performance has been good, driven mainly by the increase in luxury hotels as they experienced 2.3% year-over-year growth in the metric. . The ADR in Upper Upscale, Upscale and Upper Midscale hotels, however, declined by varying degrees, falling by between 1% and 4%. Meanwhile, the most marked decline were recorded in Midscale & Economy hotels, where the ADR dropped by over 10%.

Analysis of the daily data shows that, during Golden Week, the price of a hotel room peaked on 3 October. From 2-4 October, the ADR exceeded RMB660, while on 7 October rate fell to just RMB492.

Revenue Per Available Room (RevPAR): RevPAR fell 2.3% on the same period last year as a result of occupancy decline. The performance of hotel classes also differed greatly, with the luxury properties performing best and recording a decline of only 0.5% on 2018 levels. Upper Upscale, Upscale and Upper Midscale hotels suffered from the decline in both the occupancy and ADR, resulting in RevPAR dropping by between 5.0% and 7.0%, while Midscale & Economy hotels recorded a decline of more than 15.0%.

Major cities

Beijing

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Beijing skyline

Because of the impact caused by the strict security imposed for the National Day military parade, the occupancy rate in the Beijing hotel market fell by 13.0% compared with the same period last year. Hearteningly, however, the occupancy rate picked up rapidly on 2 October, while a 6.3% increase in the ADR meant that the RevPAR decline was softened to7.9%.

Looking at the performance of Beijing’s various submarkets, the Southeast EDZ and the Beijing Surrounding saw an year-over-year increases of 14.1% and 2.7%, respectively, while other areas witnessed varying degrees of decline. The Beijing Yansha/Guozhan/Jiuxianqiao, the West Haidian, the Downtown Wangfujing, and the North Olympic Park all recorded declines surpassing 10.0%.

This market performance is reflected by hotel classes. Luxury, Upscale, Upper Midscale, Midscale & Economy hotels all recorded a marked decline of more than 10% on average compared with the same period last year, driven by a drop in the ADR.

Shanghai

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Shanghai skyline

Driven by a 9.8% ADR increase on the same period last year, Shanghai recorded an increase of 2.6% in RevPAR. Compared with Beijing’s Golden Week performance, low occupancy resulted in  RevPAR exceeding Beijing levels by only RMB8.00, despite ADR being more than RMB50.00 higher than in Shanghai.

In terms of Shanghai submarkets, the Puxi South recorded  particularly outstanding performance with an 8.0% increase on the same period last year. The performance of the markets in the Pudong Surrounding and Puxi Surrounding also showed positive growth. The most marked decline was recorded in the Puxi Centre and Puxi South, where market performance dropped by more than 4.0%.

For hotel class performance, the most marked decline was recorded in Upper Midscale hotels, where market performance dropped by more than 12.0%.

Chengdu

As one of the most important tourist destinations in China, Chengdu’s hotel market performed fairly well during the 2019 Golden Week. Despite a lack of demand, the 0.7% RevPAR increase  on 2018 levels was driven primarily by a sharp ADR increase (+9.8%). Particularly outstanding performance was recorded in the Chengdu Centre & North market, with an increase of 4.1%,, whereas the Chengdu Surrounding and Chengdu South recorded  year-over-year declines of 8.8% and 3.0%, respectively.

Hangzhou

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Hangzhou scenery

Another popular tourist destination, Hangzhou performance was below Chengdu levels. The occupancy rate during the 2019 Golden Week dropped by 9.9% compared with the same period last year, which was reflected by a comparative 4.6% drop in RevPAR. Market performance in the Hangzhou Surrounding and Hangzhou West Lake CBD, falling by 12.7% and 9.4%, respectively. The hotel markets in the Qianjiang and Qiandao Lake areas performed outstandingly, recording 10.2% and 5.2% increase in market performance, respectively, compared with the same period last year.

Sanya

As a tourist resort, Sanya’s hotel market performed extremely well during the Golden Week. Thanks to increases in both occupancy rate and ADR, RevPAR rose by 9.0% compared with the same period last year. The peak occupancy period ran from 2-4 October, with  average daily occupancy of over 84.0% and a corresponding ADR exceeding RMB1,500.

Looking closely at the market performance of Sanya’s various submarkets, Haitang Bay came out on top, with an increase in market performance up 13.3% compared with the same period last year, while market performance in the Sanya Centre also saw an increase of 7.8%. Comparatively, the performance of the hotel market in the established tourist resorts of Sanya Bay and Yalong Bay was slightly weaker, down more than 2.0% compared with the same period last year.

What is worth noting is that the market performance of luxury hotels in the Sanya market has been impressive, with RevPAR rising by 11.4% compared with the same period last year, while other hotel classes recorded varying degrees of decline.