Recently, international hotel giants including Marriott, IHG, Hilton and Hyatt released their second-quarter 2026 financial results.
First, let’s look at their global performance.
In the second quarter of 2026, Marriott International reported revenue of USD7.071 billion, up 4.85% year over year. Hilton reported revenue of USD3.341 billion, up 6.5%, while Hyatt posted revenue of USD1.829 billion, up 1.16%. IHG did not report standalone second-quarter figures, but its first-half revenue reached USD1.255 billion, up 7% year over year.
The financial results suggest that the global hotel market remains relatively healthy. The quarter was marked by the war in the Middle East, disruptions to shipping through the Strait of Hormuz and significant volatility in global oil prices. Against this backdrop, all four hotel groups except Hyatt recorded revenue growth of 5%-7%, while EBITDA also increased significantly. This indicates that demand for international business travel and leisure remains relatively resilient.
So, how did these hotel groups perform in China?
In the second quarter, Marriott’s Greater China business generated USD68 million in revenue, up 6% year over year. All three key operating indicators improved. RevPAR rose 2.6% to USD81.07, ADR increased 2.6% to USD117.21, and occupancy edged up 0.1 percentage point.
Hyatt delivered the strongest performance in Greater China during the quarter. Its Greater China RevPAR rose 7.2% to USD93.80, while ADR increased 6.1% to USD127.60. Occupancy reached 73.5%, up 2.1 percentage points. Compared with the other three hotel groups, Hyatt recorded the highest levels across all three key operating metrics in Greater China.
Hilton’s Greater China RevPAR rose 1.2% to USD66.80. ADR edged down 0.3% to USD97.42, while occupancy increased 1 percentage point to 68.6%.
IHG did not disclose the absolute figures for its three key metrics, but reported year-over-year changes. RevPAR increased 0.8%, ADR rose 0.2%, and occupancy improved by 0.4 percentage point.
Several conclusions can be drawn from these figures.
First, the upper midscale hotel market is recovering. With the exception of Hilton’s 0.3% decline in Greater China ADR, all other indicators reported by the four groups increased. Looking at the past three years, the trajectory is becoming increasingly clear: the market moved from decline to a bottoming-out phase, and is now entering a rebound.
Second, the more upscale the hotel, the stronger the recovery. Among the four international hotel groups, Hyatt’s Greater China performance stands out. One reason is its relatively upscale positioning in China. Hyatt has only around 200 hotels in the country, compared with more than 700 each for IHG, Hilton and Marriott. IHG is by far the largest, with more than 1,400 hotels either open or under development.
The much larger footprints of IHG and Hilton are partly attributable to their extensive portfolios of midscale and economy brands, which have expanded aggressively into lower-tier Chinese cities. These branded midscale and economy hotels in third- and fourth-tier cities are also recovering, but their momentum remains weaker than that of Hyatt’s upscale hotels in China’s first- and second-tier cities.
Why is there such a gap?
There are two main reasons.
First, high-value industries, business activity and consumer spending are becoming increasingly concentrated in China’s first- and second-tier cities. Demand for business meetings and conferences, high-end weddings and large-scale events in lower-tier cities has also been hit by the weaker economic environment over the past two years, resulting in softer demand.
Second, hotel oversupply is more severe in third- and fourth-tier cities than in first- and second-tier cities. During China’s previous real estate boom, many lower-tier cities built excessive amounts of commercial real estate and apartment projects, many of which were later converted into hotels.
At the same time, IHG and Hilton have continued to push their midscale and economy brands into lower-tier markets, while domestic players such as Jin Jiang, H World and Atour have also aggressively expanded midscale hotels in these cities. The result is severe oversupply and intensifying competition.
First- and second-tier cities have also seen hotel supply expand, but their larger market capacity gives them greater ability to absorb new inventory. Moreover, international luxury hotel brands still retain a degree of scarcity value in these markets. At least for now, Chinese hotel brands have yet to fully match international players at the luxury end of the market. This gives international luxury hotels in major cities some protection from the intense competition seen in the economy and midscale segments.
Third, what is driving this recovery, and how long can it last? The current recovery is particularly visible in the upper midscale segment and in China’s first- and second-tier cities.
The main driver is normal growth in market demand. On the demand side, China’s hotel industry does not face a fundamental problem. The bigger issue has been on the supply side: hotel supply expanded too quickly, outpacing the growth in demand.
After two to three years of adjustment, demand in the upper midscale segment is beginning to recover naturally. High-quality and scarce brands are among the first to feel the improvement.
Hyatt has the smallest footprint among the four groups and a relatively selective presence in China, and its financial performance reflects that advantage. Other international hotel brands are also benefiting from the recovery, partly because they face less direct competition from domestic brands at the luxury end.
By contrast, midscale and budget chain hotels—with the largest supply expansion and the fiercest competition—are likely to be the last to benefit from the recovery.
