APPD Market Report Article

Shanghai

May 26, 2024

Nihat Ercan, CEO - Hotels & Hospitality Group, Asia Pacific

15.9%

RMB 630

RevPAR
Rising

Growth in international demand

  • The domestic tourism market continued to recover, and monthly international tourism arrivals maintained a fast-growing trend. Shanghai welcomed 705,200 international arrivals in the first two months of this year, triple the number compared to the same period last year.
  • In Q1 2024, the revenue per available room (RevPAR) of Shanghai’s upscale hotel market recovered to 93% of the same period in 2019. The average daily rate (ADR) and occupancy recovered to 98% and 95% of the 2019 level, respectively.

New supply in 2024 from refurbishment and rebranding

  • In 2024, 2,107 upscale-and-above rooms are slated to open. No new hotel rooms were introduced to the market in the first quarter.
  • There are multiple assets in the pipeline undergoing repositioning, such as Sofitel Shanghai North Bund (384 rooms, rebranded from Jiulong Hotel), Hyatt Centric Zhongshan Park (249 rooms, rebranded from New World Hotel), and Alila Shanghai (188 rooms, rebranded from Four Seasons).

Shanghai’s upscale hotel market shows good recovery

  • Shanghai’s upscale hotel market registered an occupancy of 61.5% and an ADR of RMB 1,024, reflecting y-o-y growth of 6.9% and 8.3%, respectively. The resultant RevPAR of RMB 630 recorded a y-o-y growth of 15.9%.
  • As one of the major investment destinations in the hotel sector, Shanghai recorded 39% of China’s hotel investment transaction volume in 2023, driving a continued increase in the number of enquiries in the city in the first quarter.

Outlook: Steady progress in Shanghai’s hotel market

  • The Two Sessions have ignited strong momentum in the Shanghai market, with the MICE sector anticipated to reach unprecedented levels. The recent easing of visa restrictions is likely to encourage more inbound tourism, further boosting the performance of hotels. As a result, a continued recovery in hotel performance is expected throughout 2024.
  • As another new market trend, effectively revitalising hotel assets has become increasingly important. In the near future, the hotel industry’s repositioning, rebranding, renovation and rejuvenation will become a new chapter in mainland China.

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

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