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China Hotel Industry Study 2011 Report

Travel News Asia Latest Travel News Podcasts Videos Tuesday, 26 July 2011

Horwath HTL released its Annual China Hotel Industry Study 2011 (Financial Year 2010) at the 8th China Hotels Development Conference, organized by the China Tourist Hotels Association (CTHA).

The conference, held at the Dragon Hotel Hangzhou, attracted more than 200 participants from across the country, including leaders of hotel management companies, hotel owners, developers, investors and government officials.

 "The Chinese hotel market showed strong signs of recovery in 2010 after hitting rock bottom in 2009. Gross Operating Profit (GOP) levels increased for all star-rating categories, with 3-star hotels leading with the largest increase of 52%," said Damien Little, Director of Horwath HTL Beijing. "However, positive growth in GOP was not spread evenly throughout the country; many hotel markets across the country need to see a lot more growth before performance levels could be considered healthy."

The study, in its ninth year of publication, highlighted three key trends that have emerged in the Chinese hotel market between 2005 and 2010.

Firstly, domestic demand sources now account for a larger share of total demand in the 4 and 5-star categories. This significant shift, which has been evident in all corporate, leisure and MICE segments, is reflective of a changing market environment in China.

Secondly, domestic ADR levels are increasing while foreign demand ADR has declined. However, it should be noted that the growth in domestic ADR, although positive, has been marginal. The drop in foreign demand ADR has been credited to the weakness in foreign demand, increase in supply of international hotels in smaller secondary markets, and an oversupply situation in many markets resulting in price discounting.

Lastly, ADR of the 3-star market has increased, due to the increasing number of internationally branded, limited service hotels participating in the 2011 study and the greater share of corporate demand.

About 664 hotels across 138 cities in 30 provinces in the country participated in the Annual China Hotel Industry Study 2011, representing 206,517 guestrooms across star rating categories and a combined total revenue of about RMB 55.4 billion.

The annual study is co-published by Horwath HTL and CTHA, and approved by the National Tourism Administration and the National Bureau of Statistics of the Peoples Republic of China.

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