APPD Market Report Article

Shanghai

February 28, 2022

37.1%

RMB 510.3

RevPAR
Slowing

Travel demand continues to be disrupted

  • Since the travel restrictions in the Yangtze-Delta region were lifted in early September, Shanghai welcomed around 18 million tourists during the Golden Week holiday, a 103% increase compared to 2020 for the same period. This notable jump shows a clear recovery in domestic leisure demand.
  • However, recurring pandemic outbreak in late November and in mid-December has dampened travel demand to Shanghai.

2021 ends with over 3,700 new rooms added

  • A total of 3,718 guest rooms opened in 2021. Landmark luxury hotels include Shanghai J Hotel (165 rooms), JW Marriott Hotel Shanghai Fengxian (265 rooms) and Qiantan Shangri-La (564 rooms). Due to some opening delays in 2021, Shanghai will see a bump in new supply in 2022 with another 5,756 rooms expected to enter the market.
  • Marriott welcomed its first Moxy in China, namely Moxy Shanghai Hongqiao CBD (158 rooms). The Moxy Shanghai Xuhui (253 rooms) also opened in late December.

Shanghai luxury hotel RevPAR improves y-o-y

  • As at YTD December 2021, Shanghai five-star hotel revenue per available room (RevPAR) increased y-o-y by 37.1% to RMB 510. However, on a two-year basis, hotel RevPAR was down by 35%. This was due to the continuous disrupted travel demand, limited international arrivals and rising rate competitions.
  • Shanghai hotel and serviced apartments transaction volume reached RMB 4.0 billion in 2021, accounting for nearly 30% of the total hotel transactions in China. Motivated to diversify their asset allocation and restricted by outbound capital controls, domestic investors dominated the market with the acquisition of Fraser Place Shanghai Xintiandi, and Greenland Jiulong Hotel, etc.​

Outlook: Repositioning turns prominent as market recovery stumbles

  • Provincial travel restrictions are expected to be in place for at least the first quarter of 2022 amid fears over the transmission of new variants and the upcoming Winter Olympics in February 2022. This would likely impact leisure and business demand to Shanghai. Nonetheless, hotels, particularly suburban resorts, are expected to receive a boost from strong family staycation demand.​
  • Hotels opened during the 2010 World Expo boom are now beginning to have their management agreements come up for renewal. This has led to a prominent trend of rebranding in the industry. This includes the iconic Le Royal Meridien Shanghai on East Nanjing Rd that is recently converted to Hilton’s luxury brand Conrad.

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

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