Growth in international demand

• The expanded visa-free policy was a pivotal booster in China inbound tourism. Shanghai received around 3.0 million international tourists in the first six months of 2024, increasing 143.5% from the same period last year.
• Shanghai Municipal Culture and Tourism Bureau reported strong demand during the Labour Day holiday, with Shanghai welcoming a total of 16.2 million tourists, representing a y-o-y increase of 3.8%.

More new rebranding projects to be expected

• Shanghai’s upscale-and-above hotel market welcomed around 560 new rooms in the first half of 2024, including Sofitel on the North Bund (rebranded from Jiulong Hotel) and Hyatt Centric Zhongshan Park (rebranded from New World Hotel).
• Another 1,650 new rooms are expected in the second half of 2024 by hotels like Alila Shanghai (188 rooms, rebranded from Four Seasons) and Zhangjiang voco (240 rooms, rebranded from Ramada).

Shanghai’s upscale hotel market shows continued recovery

• YTD June 2024 RevPAR citywide continued to improve from the same time last year, mainly led by significant rise in occupancy to offset stable ADR levels.
• Hotels in Shanghai continue to gradually close the gap in trading performance with pre-pandemic times. However, the pace of recovery remains slow.

Outlook: Hotel performance to improve further

• The relaxation of inbound policies has sent more positive signals. Hotel performance is expected to further recover in 2024. As another emerging market trend, the importance of renovating existing hotel assets is growing.
• Investor confidence in Shanghai’s hotel market recovery drove HNWIs with conglomerates to actively invest. They prioritise financial returns, risk aversion and diversified portfolios, with less sensitivity to land tenure and payback periods.