Growth in international demand

• Domestic tourism market continues to recover, and monthly international tourism arrivals maintain a fast-growing trend. Both help the recovery of Shanghai’s upscale-and-above hotel market. Shanghai welcomed 423,000 and 478,000 international visitors in October and November, respectively, which represent 49% and 57% of visitors in the same month in 2019.
• There were approximately 3.2 million international visitors from January to November 2023, 39% compared to the same period in 2019. 

A total of 1,995 new rooms open in 2023

• The 135-room Regent Shanghai On The Bund soft opened in late December. With this addition, total new supply reached 1,995 rooms in 2023.
• Due to project delays, 4,927 more rooms are anticipated to open in 2024. Both Alila Shanghai (188 rooms) and Sofitel on the North Bund (384 rooms) were delayed, but Sofitel is expected to open in February 2024.

YTD RevPAR reaches 90% of 2019 levels

• In 2023, Shanghai’s upscale hotel market registered an occupancy of 67% and an average daily rate (ADR) of RMB 1,050, reflecting y-o-y growth of 62.4% and 26.1%, respectively. The resultant revenue per available room (RevPAR) of RMB 704 recorded a y-o-y growth of 104.7%.
• Compared to the same period in 2019, occupancy was marginally lower by less than 5 percentage points. However, ADR recovered to 96% of the 2019 level, resulting in a RevPAR that was 10% below the 2019 level.

Outlook: More favourable inbound policies aid recovery

• Recovery of domestic and international demand is expected to sustain the growth trajectory in tourism and hotels. In addition, Shanghai’s hotel business continues to rebound, pumped up by the relaxation of inbound policies.
• Under the impact of market macroeconomic factors, price expectations are returning to rational levels. Thanks to the swift recovery of hotel performance, more investors are starting to focus on hotel investment opportunities, which will likely drive a higher transaction volume in 2024.