COVID-19 webinar summary: 5 key points on China (1 April)

While COVID-19 continues to have a devastating impact on hotel industry performance, Mainland China’s hotel industry has started to see early signs of performance recovery.

As STR continues its commitment to keeping the hospitality industry updated during this difficult time, our webinar series will provide in-depth updates on global regions. However, if you’re unable to watch the full session during this stressful period, you can find a summary of the key points below.

Chengdu and Xi’an leading early recovery

Among all key Chinese markets, Chengdu and Xi’an have seen the greatest signs of performance recovery. Xi’an occupancy reached 35% this past weekend (27 through 29 March). Beijing posted one of the lowest occupancy level among all key markets in Mainland China due in part to the continuous strict travel limitations.

Market Highlight: Chengdu

Midscale and Economy hotels in Chengdu have seen a stronger performance recovery since February due to price flexibility. Luxury and Upper Upscale hotels, however, will face more challenges due to their location in city centres.

Chengdu was announced last week as it was confirmed that the 102nd Sugar and Wine Exhibition (China Food and Drink Fair) will be held from 21-23 May. This is the one of the biggest events of the year for Chengdu, and this is the first confirmed major event in China right now, which is a very positive signal.

Open Hotels in China

As hotels in China are slowly starting to operate, 88% of STR’s hotels sample in the country were in operation as of 1 April. Despite demand still being low, hotels are starting to prepare for the upcoming recovery. Luxury and Upper Upscale hotels are seeing the largest open rates, 97.0% and 98.3%, respectively.

Wuhan, a quick recovery

Wuhan, the epicenter of COVID-19, is a market that has seen a quicker recovery due to an influx of volunteers, military personnel, doctors from other areas, etc. in the city. However, since 17 March, when the first medical workers left the city, business has slowed down in Wuhan.

Hotels Recovery Patterns

As previously mentioned, Midscale and Economy hotels gained higher occupancy thanks in part to their flexibility in prices. Different from hotels in city centers, surrounding hotels have seen faster recovery in Mainland China due to domestic leisure tourism, corporate meeting and quarantined guests staying at hotels close to the airports.

Despite hotels being closed, food and beverage played an important role during this time thanks to delivery services.