Golden Week Impact

Did the Mid-Autumn Festival and the National Day stimulate more recovery for Mainland China’s hotel market? Or did sporadic local cases of COVID- 19 affect the overall performance of hotels? Are there evident performance differences among hotels from different class segments across the country? In comparison to pre-COVID periods, where is the Chinese hotel industry in overall recovery? As the world's largest provider of data & analytics services for the global hospitality industry, STR integrates nationwide hotel data from the Chinese Golden Week holidays to bring you the latest industry overview.

Notable Northwest Market

From a regional perspective, with the continued growing popularity of tourist destinations such as Xinjiang and Qinghai, Northwest China became the market with the highest hotel occupancy at a remarkable 63.0% during the Golden Week holidays. Central China, East China, Southwest China and South China were almost on par in market performances, with occupancy rates fluctuating slightly around 60.0%. North China demonstrated a mediocre performance with occupancy at 55.0%. The performance of the Northeast region was lagging at 50.0%. Compared with the first three quarters, performance of the Mainland China’s market did not show much improvement during the Golden Week holidays.

Overall performance

From a holistic view, hotel occupancy during this year’s National Day holidays was not as strong as expected, and the expected “retaliatory” rebound in performance did not happen. This year’s Golden Week holidays showed the weakest demand of the past three years as domestic pandemic control measures were still relatively strict, several institutions and universities had shortened their holidays, and several confirmed COVID cases in cities such as Harbin and Xiamen surfaced.

Performances during the Golden Weeks from the past three years did show similar growth trends, however, with the occupancy rates gradually increasing from the days before the National Holiday on 30 September, peaking during 2-4 October, and then slowly declining. In 2020, as the Mid-Autumn Festival and the National Day had merged into an extended 8-day holiday, hotel performance in the second half of the break was comparatively strong. This year the aggregated hotel occupancy in Mainland China exceeded 70.0% for just two days (2-3 October) and was still 10 percentage points below the peaks from the previous two years. Demand of the 2019 National Holiday week was the most prosperous, with occupancy rates exceeding 80.0% for 3 days (2-4 October).

Hotel performance by region

Among all major cities across Mainland China, only Sanya and Shanghai exceeded their respective occupancy rates in comparison with the same October period in 2019.

After a market downturn in August, Sanya started recovering slowly in mid-to-late September then ushered in a boom in October. Occupancy rate climbed from its lowest point of 10% in August to more than 90% on 3 October. Compared with the performance of Golden Week 2019, this year Sanya's occupancy index reached 109 while average daily rate (ADR) indexed at 121. Under the unfavorable climate of the country’s overall performance, Sanya had once again secured a leading position. Other than Sanya, Hainan province's other regions performed equally well, with occupancy exceeding 75.0% for three consecutive days on 2-4 October and even surpassing 80.0% on 3 October.

Benefiting from the popularity of Huangdao district and Qingdao’s city center district, the occupancy rate of Qingdao’s overall market reached 90.0% on 3 October. ADR was close to CNY 800, showcasing an increase of 16.0% from the same date in 2019. The occupancy of Qingdao’s central districts exceeded 90.0% for three consecutive days on 2-4 October and ADR went beyond CNY1000, which was 20% above comparable 2019 levels.

Among the four first-tier cities, Shanghai was the only market whose dual indicators were higher than 2019 levels, with hotel occupancy rate and ADR indexed at 105 and 119, respectively. Unexpectedly, the overall performance of the other first-tier cities was relatively weak, yet given the strict COVID-19 prevention and control measures, such performance is reasonable. Beijing's ADR resilience was shown in an ADR index to 2019 of 123, and such an exceptional performance was the best among the four first-tier cities, but the market’s occupancy index was still less than 90. Shenzhen demonstrated mediocre performance with indexes only slightly above Mainland China’s market average, unable to demonstrate the capability of a first-tier city. Guangzhou was behind the first-tier cities’ overall performance, with the occupancy rate and ADR below comparable 2019 levels.

Among other major cities, occupancy and ADRs in Tianjin, Dalian and Wuhan were all below comparable 2019 levels. Although the ADR index for Shenyang reached 109, the market’s occupancy index was lagging behind other cities at only 68. The National Games’ impact on tourism remained in Xi’an, however, the market’s performance during this Golden Week was not proportional to the city’s current visibility. ADR was about the same as in 2019, but occupancy recovered rather slowly with an index of 70. Chengdu and Hangzhou, two popular tourist destinations, did not demonstrate optimal market performances. However, the resilience of neighboring cities, Chongqing and Ningbo, could not be underestimated. The two cities had occupancy rates close to that of the same period in 2019 and achieved even higher ADRs this year.

Hotel class performance 

In terms of revenue per available room (RevPAR), Luxury and Upper Upscale hotels were still the main market forces. During this year’s 7-day National Day holidays, indices for hotels from Upper Upscale and above classes exceeded comparable levels in 2019 for six days with the highest index reaching 111. In contrast, none of the other class could catch up to their 2019 performances. Hotels in the Midscale and Economy classes only achieved an index of 70. As can be seen, family vacations that were mainly driven by leisure travels produced a great demand for high-quality experiences. Midscale and below hotels therefore performed the weakest during the middle of the Golden Week holidays. Yet, the days just before and after the holiday produced higher business travel demand which drove an increase in occupancy and stimulated a rise in RevPAR.