APPD Market Report Article

Beijing

May 31, 2022

35.7%

RMB 405

RevPAR
Rising

Growing demand in Suburbs and Winter Olympics venues

  • Due to repeated outbreaks, local leisure demand is concentrated in the Suburbs of Beijing. According to the data from Beijing Municipal People’s Government Information Office, Beijing’s leisure agriculture and rural tourism received RMB 630 million of tourism revenue in the first quarter, representing a 24.7% y-o-y increase and returning to the pre-epidemic level.
  • Based on STR, the Winter Olympics attracted incremental demand to the Beijing upscale hotel market between 4-20 February, especially for the hotels with Olympics-related group contracts. Following the closing ceremony, some of the Olympics venues, such as Shougang Park, have become new tourism demand generators in the city.

No new supply added in 1Q, further delays expected

  • No new supply completed in the first three months of 2022.
  • The Sheraton Beijing Huairou Hotel, which was expected to open in February 2022, has been delayed to 2023.

Control policies and outbreaks impact Beijing hotel performance

  • As control policies continued, the occupancy of Beijing’s upscale hotel market remained under 40% in the first quarter. As of March 2022, the average daily rate (ADR) and occupancy were RMB 1,109 and 36.5%, respectively. As a result, revenue per available room (RevPAR) stood at RMB 405, an increase of 35.7% from the same time in 2021, representing around 55% of the same period in 2019.
  • Although the Winter Olympics were only opened to a select group of invited spectators, from the week before the Winter Olympics to the week after the closing of Beijing’s key submarkets (Beijing North Olympic Park, Yansha, CBD, and Wangfujing) have surpassed the 2019 level in RevPAR.

Outlook: Short-distance travel will become a new normal

  • The government is firmly committed to the dynamic zero-COVID-19 policy. It is expected that Beijing’s entry and exit policies will not be eased before the new round of Omicron outbreak comes to an end. However, the leisure demand from Beijing citizens will bring opportunities for Urban staycations and city-surrounding hotels.
  • The long-term performance of Beijing upscale hotels is expected to maintain a good recovery trend with increasing tourist attractions in the city, on the back of a strong local demand.

Note: Beijing Hotels refers to Beijing's upscale hotel market.

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