China’s Hotel Industry First To Show Growth Amid Pandemic

The hotel industry in China is back in business, experiencing year-over-year revenue growth despite the negative economic impact of the worldwide pandemic that locked down most of the globe, according to a Skift report on Tuesday (Oct. 20).

The industry’s key metrics were up the week ending Oct. 10 — occupancy, daily rates, and revenue per available room, according to the latest STR Report, which included the Golden Week national holiday. The STR Report is the Smith Travel Research benchmarking tool that measures and compares data from like hotels. 

According to the report, occupancy was up nearly 3 percent, daily rates up almost 10 percent, and revenue per room up more than 13 percent. A Bernstein analysis of the data indicates that China is the first country experiencing year-over-year revenue growth in the hotel industry since the start of COVID-19.

Richard Clarke, a senior analyst at Bernstein, told Skift this is a bit of good news and a possible indication that “a vaccine is not necessarily a prerequisite to a recovery in travel.” 

He added that the numbers show there is “no material behavioral change to travel patterns. Once restrictions ease, travel recovers.”

Golden Week saw people flocking to Wuhan, where the outbreak began, and it was the most visited Chinese city during the week-long national holiday. 

Although Golden Week bolstered much of China’s hotel industry, the rebound wasn’t experienced across the country. Revenue per room in Shanghai was down by almost 4 percent compared to 2019. Hong Kong is not rebounding as quickly as the mainland, with revenue per room off almost 53 percent.

China’s Ministry of Culture and Tourism gave local governments the green light on July 13 to resume travel and hospitality activities. 

The Chinese retail economy has also been on the rebound, with the Chinese National Bureau of Statistics reporting that August sales rose for the first time in 2020, up 0.5 percent over 2019. In addition, industrial production went up 5.6 percent, beating expectations by 5.1 percent.