Review of Shenzhen Hotel Data Information Seminar

On 25 November 2021, STR held the Shenzhen Hotel Data Information Seminar at Hilton Shenzhen Futian.

During the seminar, STR’s North Asia Business Development Manager, Wanqing Yang, presented on the topic of "Shenzhen Hotel Performance Observations” with analysis of the latest developments in the market.

STR's Regional Manager of North Asia, Liu Bo, joined hands with Wang Ying (vice president of Great China International Hotel Management), Ms. Wang Huiyang (senior hospitality consultant and CEO of Huamei Consulting Group), Ms. Huang Xuan (CEO of brand development at Jin Jiang Hotel (China) ZMAX & Chao Man), and Li Xucan (investment and development director of Shenzhen China Merchants Aden Hospitality), to share views on " The Greater Bay Area - Opportunities & Challenges of the Hotel Industry."

The following content is a summary of this STR seminar:

Hotel performance of first-tier cities

Amid the strong spread of the new Delta variant and the strict “zero-infections” COVID-19 prevention policy, domestic hotels in China had been on a "roller coaster ride" with ups and downs for more than six months. Right after the pandemic hit Guangzhou and Shenzhen during May and June, the Nanjing pandemic wave had caused another nationwide shock at the end of July. The highly anticipated summer vacation and the optimistic Golden Week holidays did not meet the initial expectations.

Nevertheless, over three months (August-October), Shenzhen still stood out among the four first-tier cities and became the market with the highest revenue per available room (RevPAR), driven by excellent occupancy levels.

When benchmarked against midscale and economy hotels in the first-tier cities, the performance of the Shenzhen market was even more impressive. During the most severe period of the pandemic in Guangzhou and Shenzhen, the rebound rate of midscale and economy hotels in Shenzhen was surprisingly fast (especially in comparison with the Guangzhou market, which also experienced the hit). Since July, regardless of market fluctuations, the occupancy performance of midscale and economy hotels in Shenzhen has continuously been in the leading position among all the first-tier cities. The overall performance of similar-level hotels of other regions in Mainland China lagged further behind.

Hotel performance in various regions of Shenzhen

In October, all regions within Shenzhen achieved relatively positive market performances. The Nanshan led in average daily rate (ADR), while the Futian district accomplished a slightly higher occupancy rate, and the RevPAR of the two districts was about the same. The October occupancy rate in the Luohu district was solid, and hotels in the surrounding areas of Shenzhen were not far behind. The overall market performed well in October.

Shenzhen serviced apartment performance

In addition to traditional hotels, there is a considerable number of serviced apartments in Shenzhen, as in recent years the demand for apartments has been increasing. As most of the service apartments in the Shenzhen market partnering with STR are concentrated in the upper upscale and upscale classes, the hotels from the same market classes were selected as a benchmark. Whether it was during pre-COVID 2018 & 2019, within the pandemic breakout phase of 2020, or in the recovering stage of 2021, the RevPAR performances of Shenzhen serviced apartments far exceeded hotel-comparable levels.

Greater Bay Area Hotel Industry Outlook

According to STR's pipeline data, the Greater Bay Area has always been notable for its potential growth in supply. Shenzhen has the largest number of new hotel rooms in the Guangdong province, following by Zhuhai, Guangzhou and Foshan. With the recent establishment of the Guangdong-Macao In-Depth Cooperation Zone in Hengqin, the Greater Bay Area has entered a new stage of full implementation and acceleration. The Chief Executive of Hong Kong, Carrie Lam, brought forward the "Northern Metropolis Development Strategy" on 6 October. The strategy proposed to transform the northern part of Hong Kong into a dynamic district and to promote a close cooperation between Shenzhen and Hong Kong. The successive introduction of these favorable policies will further boost the development of Greater Bay Area’s hotel industry.

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