Beijing’s demand continues to recover

• Beijing’s tourism market saw a full recovery in 1H23, as evidenced by promising tourism data. According to data from the Beijing Municipal Culture and Tourism Bureau, during the May Day period, Beijing’s tourism market performance surpassed 2019 levels, with a total of 9,128,000 tourists, exceeding the same period in 2019 by 6.6%.
• The MICE market continues to rebound, but demand is growing at a slower rate than the rapid recovery observed in the leisure segment. There were only 66 conferences held in 1H23, representing 63.5% of 2019 levels (104 conferences).

No new supply of upscale hotels in 2Q23

• The Swiss Hotel Hong Kong Macau Centre (initially opened in 1991) reopened in April 2023 after a four-year renovation and refurbishment with 467 rooms and suites. The hotel market in China has gradually entered the inventory era, especially in Beijing, with sluggish growth of new supply. Rebranding and renovation or conversion have become new challenges for hotel owners.
• No new supply of upscale hotels is expected to open in 2023. The opening of Hyatt Regency Beijing Daxing, originally planned for March 2023, has been postponed to 2025.

YTD RevPAR reaches 86% of 2019 levels

• In April, the performance of the Upscale Hotel market in Beijing further improved, with occupancy reaching 70.1%, ADR reaching RMB 1,145 and RevPAR rising to RMB 803. There was a slight decline in May, with RevPAR falling to RMB 720. However, RevPAR increased to RMB 793 again in June, which reached 95.2% of 2019 levels.
• By the end of 2Q23, the YTD occupancy and ADR were 63.4% and RMB 1,083, respectively. As a result, RevPAR reached RMB 686, representing an increase of 136.0% year-on-year, equivalent to 85.9% of 2019 levels.

Outlook: Beijing hotel market expected to recover energetically

• Compared to the pandemic period, short-distance travel has become less popular, but still remains the basis of local leisure travel. The trend of tourists expanding their travel radius is expected to be more prominent during the peak summer season. Domestic long-distance and outbound tours are expected to dominate summer tourism, and continue after the summer.
• In addition to the release of traditional student and family travel demand, popular cultural activities, including concerts, music festivals, dramas and special local cultural activities, should further drive tourists’ willingness to travel, pushing up market demand in the hotel industry.