Business travel showing signs of life in China
 
Business travel showing signs of life in China
20 MAY 2020 7:45 AM

While the Chinese hotel industry saw a significant performance increase during the Labour Day holiday to start May, some urban markets saw continued demand after the holiday, fueled by a modest return for business travel.

SINGAPORE—The Chinese hotel industry has been able to maintain some momentum following a noticeable bounce back during an extended Labour Day holiday, according to STR data.

(STR is the parent company of Hotel News Now.)

Speaking during the fourth installment of his weekly video series on Chinese hotel performance, Jesper Palmqvist, area director for the Asia/Pacific region for STR, said “demand levels reached new heights” in the week after the holiday, which officially ended 5 May, fueled in part by “the elusive business traveler.”

He even noted that some business-oriented submarkets in downtown Beijing showed a sharp increase in performance during the five days following the Labour Day holiday from 6 May to 10 May. Business transient was also strong enough to maintain performance levels following the holiday in Shanghai, with occupancies hovering in the 30% range. While better than performance seen so far in 2020, it still lags well behind what was seen in previous years.

“For perspective, midweek this time of year in a normal year (occupancy) is about 90%,” he said.

Palmqvist also noted that governmental policy still has a significant impact on hotel performance, pointing to relatively low occupancy in Beijing as proof of this observation.

The market had occupancy hovering in the mid- to low-teens between 12 April—when officials announced travelers had to have a certificate showing they did not carry the virus—and 30 April, when they eased that policy. Since then, occupancy has climbed to the mid-20s.

“This (governmental) demand was eased just in time for the holidays, and things really took off after that,” he said.

In terms of hotel performance, Xian has remained a relative bright spot, Palmqvist said, with occupancy over the past four weeks hovering around 40%, and performance was into the mid-50s in the market’s “High Tech Zone” with average daily rates “both consistent and at a good level. Rate in that area is only roughly 10% lower in 2020 than in 2019.”

For more of Palmqvist’s insights into the China hotel industry performance data, watch the video below.

Editor’s note: The video included in this article was filmed by STR’s Jesper Palmqvist, on 14 May and edited and produced by CoStar Group. HNN is a division of STR, a CoStar Group company.

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