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Regional China Shows Strong Growth in 2011

News STR Global has published statistics for Chinese hotels. During 11 months of 2011 hotels in this country showed a strong growth and positive performance. RevPAR here increased by 2.8% comparing to 2010.

The company has also analyzed over 315 daily rooms in 22 major cities of China and noticed an interesting trend. Hotels in secondary cities (cities with less than 11 million of citizens) feature higher growth of RevPAR in comparison with primary cities of the country. Currently hotel operators pay much attention to these cities as thanks to governmental policies they become modern centers of trading, manufacturing and technology.

For example, rapid growth of such cities as Xiamen and Chengdu coupled with weak supply has raised RevPAR by 30.8% and 20.3% respectively. Both cities become important economic and financial centers. RevPAR of hotels in Wuhan, a famous car and steel manufacturer, grew by 13.4%. However, destinations with demand primarily from leisure travellers showed decreases in occupancy. These are hotels in Hangzhou, the city of world heritage by UNESCO, and Suzhou, “the Venice of the East”. Among the reasons for decline is the growth of supply by 2% and 5.5% respectively.

Hoteliers know about this shortfall in supply and it’s expected to grow within several next years. Current pipeline until 2014 indicates that the growth of supply in secondary Chinese cities will be significant – Sanya +50.1%, Xiamen +25.9%, Xian +12%, Suzhou +11.3%, and Hangzhou +9%.


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