China was the first country affected by Covid-19, with initial reports of the coronavirus published in late December and significant spread in January, which resulted in travel bans. The Chinese hotel industry was hit hard, similar to what is happening around the world today. Nearly three months later, the industry is beginning to see signs of recovery, according to preliminary data from STR.
Mainland China's daily hotel occupancy reached an absolute level of 31.8 per cent on 28 March, up from a low of 7.4 per cent during the first week of February, according to STR. Additionally, formerly closed hotels are opening at a significant pace in key markets across the region.
"We're seeing green shoots in hotel occupancy figures, but we must stress that these are only early signs of a recovery that is likely to develop slowly," said STR regional manager for North Asia Christine Liu. "Some of the demand stems from corporate travel, primarily within the same province, as well as small-scale meetings. Additionally, hotels are seeing business from those travellers quarantined after returning to China from other countries, as well as those returning to cities for work. Overall, we're seeing limited leisure business in city centers but a bit more recovery in that segment in surrounding suburbs."
In the first week of March, Beijing's daily occupancy was around 10 per cent, but it had climbed to 21.8 per cent on 28 March. Shanghai's occupancy increased from 11 per cent on 1 March to 28.6 per cent on 28 March. The highest absolute occupancy levels were seen in Xi'an and Chengdu on 28 March, at 35.9 per cent and 35.6 per cent, respectively.
"Xi'an captured business from South Korea because of Samsung's manufacturing factory in the tech zone—expatriates were able to relocate their families to Xi'an when the outbreak hit South Korea," Liu said. "Additionally, Xi'an is one of the redirect destinations for inbound flights scheduled to land in Beijing."
In Wuhan, where the outbreak began, occupancy was 7.5 per cent on 23 January, but as medical workers entered the market, it reached a high of 72.7 per cent on 7 March. It has since retreated to 62.4 per cent on 28 March.
STR data also shows that 87 per cent of the hotels in its mainland China sample have reopened after many had closed over the past two months.