Rising rates drive Chinese hotel sector
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China’s tier one cities have experienced double-digit growth in terms of revenue per available room (revPAR) in 2011. According to the latest data from STR Global, provided exclusively to Travel Daily Asia, four out of China’s five largest cities saw strong revPAR growth in the year-to-August 2011, largely driven by average daily rates (ADR). The one exception was Shanghai, which is suffering from a huge influx of extra hotel room supply and a hangover from last year’s World Expo, which allowed the city’s hoteliers to fill more rooms.
The southern city of Guangzhou leads the way, with revPAR jumping 23.2% in the first eight months of 2011. The growth was driven by a 16.0% rise in ADR which now averages US$122 – the highest of any of the five tier one cities. Occupancy in the city rose 6.1% year-on-year to 63.8%. Beijing has also seen strong growth this year, with revPAR in the capital rising 20.9%. Rising ADR (+11.4% to US$98) and occupancy (+8.5% to 67.1%) both contributed to the growth.
Chongqing and Tianjin experienced similar performance growth in the first eight months of 2011, with double-digit revPAR growth driven by rising ADR. The western metropolis of Chongqing experienced 14.0% revPAR growth, with ADR climbing 12.6% to US$70 and occupancy creeping up 1.3% to 54.5%. In the northeastern city of Tianjin meanwhile, a 17.4% revPAR rise resulted from a 14.1% increase in ADR, to US$84. Occupancy levels remain unimpressive however, climbing just 2.8% year-on-year to 44.7%.
Shanghai was the only tier one city that failed to register revPAR growth in 2011, declining 15.6% year-on-year. The city’s hotels have been hit by a 15.4% drop in occupancy levels, which have plunged from 64.4% in 2010 to just 54.5% this year. The city has been able to hold ADR levels however; Shanghai’s rates dipped just 0.2% year-on-year to US$120.
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