APPD Market Report Article


August 26, 2022

Mike Batchelor, CEO - Hotels & Hospitality Group, Asia


RMB 293


Short-distance travel drives demand

  • Due to the pandemic outbreak in major cities in April and May, demand from both business and MICE industries in Beijing has decreased sharply. Beijing’s strict entry policy has influenced business travels substantially, with only one conference being held in 2Q22.
  • Leisure demand was mainly supported by short-distance travel. According to Ctrip, during the Qingming Festival, Beijing became the largest source of suburban travel. Although there were three public holidays in 2Q22, the number of tourist arrivals during each public holiday decreased by 8.9%, 63.7%, and 57.6%, respectively, compared to the same period in 2021.

No new supply added in 2Q22

  • No new supply completed in 2Q22.
  • Beijing Wild Goose & Pine Hotels and Resorts is expected to open in the second half of the year, adding 67 new rooms to the market. Located on the north shore of Yanqi Lake, Beijing Wild Goose & Pine Hotels and Resorts is one of the key projects for expanding and enhancing the area’s status as a key venue for international conferences, according to the Huairou District People’s Government.

Control policies in 2Q22 impact Beijing hotel performance

  • Due to the pandemic outbreak in major cities in 2Q22, the occupancy of Beijing’s upscale hotel market remained under 30%. As at YTD June 2022, the average daily rate (ADR) and occupancy rate were RMB 1,035 and 28.3%, respectively. As a result, revenue per available room (RevPAR) was RMB 293, which declined y-o-y by 34.8%, representing around 36.5% of the same period in 2019.
  • As the pandemic in Beijing stabilised in June, the performance of upscale hotels in the city demonstrated a moderate increase. Based on the data from STR, occupancy in June was 22.9%, representing a m-o-m increase of 6.3%, while ADR in June was RMB 854, almost unchanged compared to that in May, leading to a m-o-m RevPAR increase of 39.2%.

Outlook: Hotel performance is expected to recover steadily

  • In the context of a normalised epidemic prevention stance, short-distance travel has potentially become one of the growth points for market demand. The current environment creates ideal conditions for the development of the suburban travel and urban staycation economies, and the recovery of the hotel market is expected to gain momentum.
  • With the pandemic in major cities stabilising and the summer vacation period approaching, the Beijing hotel market is expected to recover at a steady speed. However, it will be challenging for hotels to recover to pre-COVID-19 levels in the short run.

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

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