For the first time in three years, China's borders were open for summer travel after the country officially lifted its strict zero-COVID policy at the beginning of the year.

Hotel brand executives said during third-quarter earnings calls that demand in China picked up greatly in the quarter, in some cases surpassing 2019 levels.

Here are some highlights from hotel company earnings calls on the continued recovery in demand from China:

“Cross-border travel continued to strengthen, helping drive RevPAR growth in the third quarter. Asia-Pacific, again, saw the most meaningful quarterly increase in international visitors, aided by global events like the Women’s World Cup and improved airlift. The percent of global room nights from cross-border guests was about 1 percentage point below 2019 levels of approximately 20%.

“The most upside is still expected to come in Asia-Pacific as international airlift to China improves. International airlift in Greater China was roughly 50% of 2019 capacity at the end of the third quarter and is expected to improve to around 60% by the end of the year.”

“You will have a very strong start [for revenue per available room growth] in China in 2024. There’s a lot of noise about China and their economy, but from a travel and tourism point of view, in China it’s very strong now. … from a pure RevPAR year-over-year-growth point of view, China and thus Asia-Pacific will lead the charge.”

“In the Asia-Pacific region, third-quarter RevPAR was up 39% year-over-year, led by the continued demand recovery in China. RevPAR in China was up 38% year over year in the quarter and 12% higher than 2019. The rest of the Asia-Pacific region also saw significant growth with RevPAR, excluding China, up 40% year over year.”

“Demand in China is extremely strong, and international travel is steadily recovering. I think the first quarter was down 60% to 2019. Second quarter was down 40%; third quarter was down something like 19% or 15% — something like that, mid- to high-teens.

“We’re seeing a steady increase in international inbound, which is really encouraging [and] a little surprising to me, actually, because air cover and air schedules are still well below where they were before. The relevance of that is that the inbound international travelers are spending more. So there’s a lot of demand; performance in hotels is really good.

“We’re seeing very strong, continuous pipeline growth but also new openings for UrCove, our upper-midscale brand, and also other projects being completed and under construction. I feel really good about the short term.

“Now, there is a dichotomy between more private-sector developers and those that have state-owned enterprises either backing them or controlling them. There’s a big dichotomy there because those who are private and depend on the debt markets are having a very tough time.

“The debt contraction, the availability contraction, is still with us and will remain with us for some time. It’s going to take the Chinese government a while to work through the bad bank issue that they’ve got with Country Garden and Evergrande. But in the foreseeable future, I’m actually optimistic that we’re going to be able to maintain both net-rooms growth but also pipeline growth.”

"In China, development activity is also coming back, with 37 hotels signed, 24 of which are in the Holiday Inn brand family. That is almost 7,000 rooms, the highest quarterly signings number since 2021. Again, we expect more in [the fourth quarter].

"China is demonstrating an excellent rebound in trading. Overall, we expect close to a 4% increase in network systems growth by end of the year.

"Third-quarter revenue per available room increased 10% versus 2022 and 13% versus 2019. ... Greater China continued its excellent rebound with RevPAR now above 2019, which the Americas achieved in the second quarter of last year; and Europe, Middle East, Asia and Africa in the fourth quarter."

“[In] Macau, I believe that the recovery is going to continue. The government issued their forecast for next year during their budget season. And we are looking at a [gross gaming revenue] number for next year around $27 billion for the entire year. And this is quite consistent with our belief, our expectation and the market consensus as well.

"Now, I think yes, in China, there is some softness in its overall macroeconomic situation. The GDP growth is around 4% to 5%, which is at the trough, if you look at the long-term window period. But I believe that Macau is not [a] … reflection of the average GDP growth or spending pattern in China.

"We, as a town, cater to about 30 million visitations a year. The unique visitation is probably less than half of that. It’s still a very small number in the grand scheme of population in China. ...

"Macau is positioned to cater to the group with high spending."

Editor’s note: Chris Nassetta serves on the board of directors for Hotel News Now’s parent company, CoStar Group.

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