The coronavirus outbreak largely limited economic activities; the tertiary industry was the first to bear the brunt.
From the 2020 Chinese Spring Festival, Covid-19 spread in China. Hubei Province was the first and worst-hit area. Successively, the contagious virus reached cities and towns all over the country within a few days. The Chinese government quickly responded to the outbreak, initiated various measures and policies to help people pull through.
Nevertheless, the pandemic paused economic activities, resulting in a huge impact especially on the tertiary industry, including the travel, hotel, and catering industries.
HVS combines existing market information and our own survey results, as well as the historical data of SARS in 2003, to dialectically determine the impact and provide an outlook on Chinese hotel industry.
Hotel Performance in Different Regions During the Outbreak
Occ Trends in Different Regions
Beijing and Shanghai markets are very similar: occupancy declined rapidly to 15% and maintained levels around 5%-10%.
As many tourists arrived in Sanya before the outbreak and were “trapped” there after the outbreak, the decline of occupancy in Sanya was delayed.
YoY RevPAR Decline in Different Regions
RevPAR of major domestic markets in first two months of 2020 dropped significantly.
Affected by both the protest and Covid-19, Hong Kong hotel market had a tough start in 2020.
Although Wuhan is the worst-hit area, the RevPAR decline of the region in February was not as bad as the other regions. One of the reasons is that many hotels still operational in Wuhan were used as quarantine quarters, bringing up occupancy levels.
About Caroline Zhang
Caroline ZhangCaroline Zhang is the Senior Director of Marketing, Greater China and Head of Shenzhen Office. She holds a Bachelor of Hospitality Business and Minor in Hospitality Business Real Estate Investment Management from Michigan State University. Prior to joining HVS, Caroline gained hotel operation experience in IHG with a rotational position and then a focus on hotel accounting and financials at Kellogg Hotel and Conference Center. She joined HVS in 2016, providing a range of consulting and advisory services for the hospitality industry in the Greater China, and is responsible for marketing and branding in this region. For further information, please contact Caroline at czhang@hvs.com
About Chang Xu
Chang XuChang Xu graduated from Ecole hoteliere de Lausanne and is mainly responsible for market research of specific hotel and real estate markets, project feasibility studies, operator searches, and hotel valuations. She also actively participates in the research and writing of various industry research publications. Her experience at Marriott's Asia Pacific headquarters and the Ritz-Carlton Hong Kong involved hotel operations, data analysis, and pricing strategies. Chang has participated in many commercial real estate development projects in first- and second-tier cities across China. For further information, please contact cxu@hvs.com
About Rachel Cui
Rachel CuiRachel, an Analyst in HVS Shenzhen Office, joined HVS Shenzhen in 2018. She holds a BA degree in Business Economics from the University of California, Irvine, and a Master in Hospitality from Boston University. As her primary duties, Rachel conducts market research and data analysis for market studies and feasibility studies. Also, she assists in developing master plans and other research exercises in the Asia Pacific region. Prior to joining HVS, Rachel gained a wide array of hospitality knowledge in the hospitality experiences in hotel operations and marketing, finance management, and hospitality real estate. For further information, please contact at rcui@hvs.com
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