APPD Market Report Article


December 1, 2021


RMB 515


Demand has fluctuated, but starting to recover gradually

  • Due to confirmed COVID-19 cases in the Yangtze-Delta region and Shanghai, tourism dynamics were greatly disturbed between August and early September. Thus, the trading performance of Shanghai hotels was greatly impacted. Shanghai’s revenue per available room (RevPAR) in August was down by y-o-y 34.7% to 388.7 RMB.
  • However, once Shanghai returned to a low-risk area in early September, its domestic leisure market recovered in full force. During the Mid-Autumn festival in September, Shanghai hosted 8.4 million tourists and generated over RMB 11.4 billion of tourism receipts, close to 2019 levels.

Around 3,000 keys are slated to open in the last quarter of 2021

  • 2,780 keys entered the market in the first three quarters, including J Hotel Shanghai (165 keys), Hilton Shanghai Songjiang Guangfulin (244 keys) and JW Marriott Hotel Shanghai Fengxian (265 keys). Majesty Plaza Hotel at People’s Square recently rebranded to Crowne Plaza, featuring 390 keys. 
  • Around 3,000 keys are slated to open this year, while some hotel openings are postponed to 2022.

YTD 3Q21 RevPAR increases by 57.2% despite the COVID-19 impact

  • The trading performance of Shanghai hotels was greatly impacted by a temporary disturbance caused by a wave of COVID-19 in August. However, the decline was offset by the strong performance in July. Thus, as at YTD September 2021, upscale hotel RevPAR grew by 57.2% to RMB 515. Both average daily rate (ADR) and occupancy levels recorded y-o-y growth of 3.6% and 19.2 percentage points, respectively.
  • The Shanghai hotel transaction market remains one of the most active in China, totalling around RMB 4.0 billion in the first three quarters. It accounted for nearly 35% of the total hotel transaction volume in China. Notable transactions include the sale of Greenland Jiulong Hotel in North Bund for RMB 860 million to Radiance Group.

Outlook: MICE market remains challenging over the short term

  • The China International Import Export (CIIE) is regarded as the greatest exhibition in November, but due to the government control prior to CIIE, no permits can be issued for exhibitions or large events. The MICE industry may return in full force after CIIE and further boost market performance.
  • Older hotels with conversion potential continue to be sought after by both domestic and foreign investors. Hotels are particularly favored by rental housing investors as such products can be easily converted into apartments, significantly reducing renovation costs.

Note: Shanghai Hotels refers to Shanghai's upscale and luxury hotel markets.

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