Growth in international demand

• Relaxed visa policies have been a key driver for inbound tourism in China. Shanghai’s overall hotel market performance remains stable as both domestic and international tourism markets continue to gain traction.
• From January to March this year, Shanghai welcomed 1.74 million international visitors, marking an increase of 37.1% compared to the same period last year.

After welcoming nearly 600 new rooms, the city is scheduled to see approximately 3,500 more upscale hotel rooms in the remainder of the year

• In the first quarter of 2025, Shanghai witnessed the addition of 595 new rooms.
• Around 3,500 new rooms are scheduled to open in the remainder of the year. Some notable future hotels include Waldorf Astoria Qiantan (203 keys), Thompson Expo (255 keys) and Shangri-La and Traders hotels near Hongqiao Airport (two totalling 611 keys).

Shanghai‘s upscale hotel market shows stable recovery

• As of March, according to the Shanghai Statistics Bureau, the city’s five-star-rated hotel occupancy rate recorded a y-o-y increase of 1.2 ppts. Despite the slight decline of 1.6% in average room rate (ADR), RevPAR remains stable with a minor increment of 0.3%. Thus, the overall market performance shows stable recovery.
• With the recovery of Shanghai’s tourism market and transformation of the real estate industry, there is an increase in demand for conversions and/or renovation of existing hotel assets, indicating that the hotel market has entered the era of stock assets.

Outlook: Strong and positive signs of rebound

• With the influx of favourable policies, the surge in international tourism to China has injected vitality into Shanghai’s hotel market in the first quarter of the year. This positive trend not only accelerates the development of the hotel industry but also sends a clear signal of a strong market rebound, despite current macroeconomic challenges.
• Hotel assets strategically located in core districts of Shanghai with stable cash flows are particularly favoured by HNWIs. Existing urban hotels with the potential for repositioning are still attractive to multifamily investors.