Policy benefits continue to unfold, encouraging further diversification of source markets

• In Q1, Beijing launched six inbound tourism measures, such as customs clearance optimisation and payment facilitation, in addition to the 240-hour visa-free policy. These measures significantly boosted the market, with inbound international tourists reaching 470,000 in the first three months of the year (+58.7% y-o-y), showing a strong tourism demand.
• Since 2024, Beijing continues to witness diversification in source markets. For example, FOCAC 2024’s spillover effects drove steady African visitor growth throughout Q1, while events like the China Development Forum boosted business demand. E-payment facilitation significantly improved traveler experience, with Russia, North America, HK/Macao/Taiwan and Southeast Asia as key growth sources.

No new hotel supply in Q1 2025

• No new notable hotels opened in Beijing between January and March 2025.
• Significant supply is anticipated to enter the market starting mid-2025, with the next wave of new supply anticipated to commence by late 2025, adding nearly 700 additional rooms to the market.

Beijing’s upscale hotel market faces pressure; ADR’s slight drop offsets stable occupancy, while last-minute bookings add uncertainty

• In Q1, Beijing’s upscale hotel market experienced a marginal softening. Despite relatively stable occupancy rates, the average daily rate (ADR) declined, leading to a slight y-o-y drop in revenue per available room (RevPAR).
• The booking window continues to shrink: both leisure and MICE bookings are increasingly showing a “last-minute” trend. Coupled with tightening corporate travel budgets, channel management and revenue management complexity have arisen, making demand forecasting more challenging.

Outlook: Cautious optimism for the near-future with global macroeconomic situation and corporate budget savings

• The 2025 China-CELAC Forum is expected to attract high-net-worth travelers, driving upscale and above hotel category demand. Its long-term spillover effects may boost Latin American visitors, reinforcing Beijing’s position as a global hub for international exchanges and strengthening market demand.
• Going forward, amid fluctuating international situation, macroeconomic shifts and changing consumer confidence, the potential for market recovery in 2025 remains uncertain. ADR rebound appears limited under the current conditions.