Horwath HTL China Publishes Key Markets Update for Q1 2011
Most Key Markets Showing Positive Growth in KPIs
Horwath HTL China has released its latest quarterly newsletter, in which it reports updates on the performance of hotels in key Chinese markets. According to Horwath HTL China and STR Global, most of the key 13 Chinese markets have experienced strong growth in occupancy, average daily rate (ADR) and Revenue Per Available Room (RevPAR) in Q1 2011, compared to the same quarter last year.
The highest RevPAR growths were recorded in Shenzhen, Xi'an and Hainan. Shenzhen, in particular, recorded a significant year-on-year (YOY) increase in RevPAR by 42% in the first quarter of this year. This has resulted in an overall positive outlook for the market, with domestic demand being the main driver for demand.
Xi'an and Hainan both experienced strong increases in occupancy and ADR, due to a lack of new supply in the former and a strong high season in the latter. ADR in the two markets increased YOY by 19 and 21 percent respectively. In Hainan, ADR reached over RMB 1,500, largely driven by aggressive rate strategies of newly opened upper-tier hotels on the island. Based on the first quarter performance, the hotel market in Hainan, especially in Sanya, has further strengthened its prime position in the overall China hotel market.
The only two key markets to record drops in occupancies are Shanghai and Hangzhou. Average occupancy in Shanghai remained at about 50%. ADR, however, achieved a notable growth of 12% YOY. Despite the rate growth, majority of hoteliers in Shanghai maintain a cautious outlook due to the expected slower pace of growth in demand, compounded by supply pressure after the Shanghai Expo. Given its proximity to Shanghai, the "Post-Expo Syndrome" has also affected the hotel market in Hangzhou. The Hangzhou hotel market saw a 2% YOY drop in market-wide occupancy in the first quarter, but a positive outlook in demand has, nevertheless, resulted in a growth in ADR.
Short commentaries on the key 13 Chinese markets are included in this edition of the quarterly newsletter. A market overview of Xi'an is also included, in which general market conditions, rate performance of the hotel market and market outlook are discussed.
The Horwath HTL China newsletter is released every quarter, reporting on key demand and supply trends in China. The complimentary newsletter can be downloaded from www.horwathhtl.asia and www.horwathhtl.com.
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