Horwath HTL: China market report update
27 March 2012
Many of China's top markets are achieving positive top-line growth when it comes to hotel performance, but continuously growing supply makes it tough for operators to gain much revenue per available room return.
According to data released by Horwath HTL at its 8th annual China Hotel Development and Financing Conference held last week, top-line growth in revenue and room demand is offsetting the problems associated with supply growth—for now.
The next six hotel markets all recorded between 20% to 30% growth in room revenue in 2011, with Sanya, Guangzhou and Tianjin at the top of this group recording around 28% growth. Beijing is at the lowest end of this group with 22% growth.
Shanghai was the only market to record a decline in room revenue in 2011. With basically zero demand growth and the loss of premium Expo 2010 room rates, Shanghai was always likely to record a decline in the volume of room revenues, according to Horwath HTL.
Of the four lowest-performing markets—Dalian, Hangzhou, Shenzhen and Shanghai—Shanghai's loss of Expo-related demand was clearly the main factor in a miserly growth of 0.3% with the others all recording RND growth of around 6% to 7%.
The next five markets—Qingdao, Chongqing, Xian, Nanjing and Beijing—all recorded between 10% to 20% growth, with Qingdao and Chongqing exceeding 15% growth in 2011. The top six markets—Tianjin, Suzhou, Chengdu, Guangzhou, Sanja and Xiamen—all recorded in excess of 20% growth in RND.