Knight Frank launches the latest Greater China Hotel Report that provides an in-depth analysis of Greater China’s hotel market and forecast.
Highlights:
• Despite the decrease in the number of visitor arrivals, international hotel brands continued to expand in Greater China. Among Beijing, Shanghai, Guangzhou, Hong Kong, Macau and Taipei, the six major cities analysed in this report, Macau remained the most active in 2013, adding over 1,700 five-star hotel rooms to its stock, followed by Beijing and Guangzhou. In the first half of 2014, Beijing became the most active city, adding over 1,300 new rooms.
• The Average Daily Rate (ADR) of Macau’s five-star hotels continued to grow in 2013, increasing 9.2% year on year, the largest gain among the six cities analysed. In the first half of 2014, Macau continued to lead the six cities with the highest ADR growth of 8.9%, compared with the end of 2013, followed by Taipei (3.1%) and Guangzhou (2.1%).
• In the first half of 2014, Hong Kong’s ADR remained the highest among the cities, reaching US$315, followed by Macau’s with US$240 and Shanghai’s with US$153.
• Beijing’s hotel industry continued to feel the pinch of the global economic downturn in the past year, while Shanghai’s hotel industry is expected to bottom out in 2015. Guangzhou’s hotel industry is significantly affected by the twice-yearly Canton Fair, and due to external uncertainty, there was a decrease year-on-year in the number of participating merchants of Spring 2014. Combined with the continuing increase in hotel-room supply, annual growth in the ADR of five-star hotels during the 2014 Spring Fair slowed by about 10%. Macau is trying to transform itself from a gambling-based city to an entertainment-based one to attract individual and family visitors.
• Hong Kong’s hotel industry remained stable in the first half of 2014, backed by strong numbers of visitor arrivals. The government’s proposal to control the number of Mainland visitors by adjusting the Individual Visit Scheme is expected to have limited impact on overall Chinese visitor arrivals, so we do not expect the local hotel market to be notably affected by this adjustment. Backed by continual strong visitor arrivals to Taiwan, we remain positive on the long-term outlook of the hotel industry.
• David Ji, Director, Head of Research & Consultancy, Greater China at Knight Frank, says “in recent years, China’s hotel market has faced increasing challenges, including fierce competition among local and international hotel brands, slower local economic growth, increasing operating costs and the government’s policies to curb the consumption of luxury goods and services. Despite this, international hotels brands have continued to show their long-term confidence in China’s hospitality market by launching aggressive expansion plans.”