Mainland China’s hotel industry has throttled out of coronavirus shutdowns and record-low occupancy rates to hosting a mix of leisure and business travel — save for a recent resurgence of coronavirus cases in Beijing.
Hotel owners elsewhere in the world should see China’s rebound trajectory both as good news and a cautionary tale.
“This does point to the kind of story we are likely to see for the coming months across the world,” said Robin Rossman, managing director of STR’s international business. “Markets will recover to the level that they’re able to with the demand that is able to reach them based on whatever social distancing or border controls there are in place. At any stage, a flare-up can cause that to dip back down.”
Mainland China’s average hotel occupancy bottomed at 7 percent in early February but rebounded to as high as 52 percent the week of June 13, according to STR. Clearing the 50 percent threshold meant business travel had begun to return, and data even showed mid-week demand eclipsed weekend demand, Rossman said.
When and if cases flare up during the reopening, China has taken a localized strategy. Authorities ordered travel restrictions, contact tracing, and a surge in testing in Beijing in response to the roughly 270 cases reported there since June 11. The Chinese government claims the flare-up has been contained.
STALLED TAKEOFF
Beijing’s recent flare-up ushered in a new round of travel restrictions to combat against the threat of a second wave of the virus spreading through China.
While it is still too early to determine any long-term impact to China’s still-recovering hotel industry, occupancy rates in Beijing dropped from 50 percent to 20 percent in a week, Rossman said. The sharp decline was enough to drag Mainland China’s overall hotel occupancy down from its 52 percent high to 47 percent two weeks ago and reverse some of the positive growth in the country’s largest cities.
“Immediately after the flare-up, we did see a bit of a plateau being hit,” Rossman said. “Hopefully, it’s a short-term thing and recovery continues when that gets resolved.”
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