About a full year into the COVID-19 pandemic, there's plenty of performance data to consider how China's hotels have fared throughout 2020 as well as the first two months of the first quarter of 2021.
Naturally, hoteliers worldwide are anxious to speculate on what China's trends could mean for hoteliers throughout the rest of the world.
Short-Term Pain, Long-Term Gain
Lessons learned from the 2003 SARS outbreak led China to implement extremely strict lockdowns beginning the week of the 2020 Lunar New Year, leading to huge declines in hotel occupancy countrywide.
The lockdowns eventually were relaxed, and Mid-Autumn Festival and Golden Week holidays in the fall of 2020 pushed occupancy above the 2019 average.
Moving into 2021, a cluster of cases in the Hebei province led to localized lockdowns, and hotel occupancy dipped before beginning the recovery cycle once again.
Lower-Tier Hotels Continue To Shine
Midscale and economy class hotels led Mainland China occupancy prior to COVID-19, and the pandemic only widened the gap between lower-tier and higher-tier hotel performance.
Midscale and economy hotel affordability likely contributed to their strong occupancy when compared to the other hotel classes. Demand from healthcare personnel and other key workers, along with less historic reliance on group demand, also helped to foster quicker recovery among lower-tier hotels.
Party On: Lunar New Year Lifts Occupancy
Even localized lockdowns couldn’t dim the Lunar New Year celebrations this year. While occupancy did not reach 2019 levels, traditional travel patterns have returned.
Occupancy declined in the days leading up to the weeklong holiday as business travel tapered off. In the days following Lunar New Year, occupancy rose due to leisure demand as residents traveled throughout the open parts of the market to visit family and enjoy time off work.
China’s strong performance remains a beacon of hope to the hospitality industry, with the reminder that matters can and will eventually improve. To hear more about this unique and compelling market, register for the Hotel Data Conference: Global Edition and check out the agenda to see the other markets and topics STR's analysts will be diving into.
Kelsey Fenerty is a research analyst at STR.
This article represents an interpretation of data collected by CoStar's hospitality analytics firm, STR.