Rapid growth in the Chinese hotel sector was reversed during 2009, with the economic downturn largely to blame. Data from STR Global find the revenue per available room (RevPAR) achieved by Chinese hotels fell by 26.2 percent during 2009 when compared with a year ago – underlining their poor performance.
This drop is in sharp contrast to the continuing good performance of the Chinese economy. According to the National Bureau of Statistics of China the country saw an 8.7 per cent year-on-year increase in GDP.
STR Global states the decline in RevPAR was largely due to a fall of 21 per cent in the average daily rate (ADR), with further impetus from a 6.5 per cent decline in occupancy.
The fall off in occupancy came amid significant increases in hotel supply during the last few years, with STR Global’s Census database showing a five per cent increase in available rooms across the country in 2009 when compared to the prior year.
The nationwide downturn in hotel performance nevertheless reflects the impact of the global financial crisis of late 2008 and 2009.
The dramatic fall in RevPAR for Beijing of 43.2 percent also reflects the impact of the 2008 Olympics, whilst Hong Kong and Shanghai also suffered but not to the same extent.
However, despite the falls, domestic travel is expected to remain strong in China over the coming year.
Domestic visitors are expected to make a significant contribution toward the 70 million people expected at Expo 2010 Shanghai between May and October, with the 16th Asian Games hosted by Guangzhou in November are also likely to boost performance.