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Hotel performance dips in Pearl River Delta

Tuesday, November 27, 2012
Hotels in the Pearl River Delta region experienced declines in terms of revenue per available room (revPAR) in October.
 
According to the latest data from STR Global, provided exclusively to Travel Daily, hotels in the four main markets of Guangzhou, Hong Kong, Macau and Shenzhen all experience declining revPAR last month, with all but Shenzhen seeing declining average daily rates (ADR) and all but Guangzhou recorded reduced occupancy levels.
 
In Hong Kong, the revPAR dip was caused by a 2.6% decline in occupancy (to 84.8%) and a slight 0.2% dip in ADR (to US$268). Macau followed much the same trend, with a small decline in already high occupancy levels (-1.4% to 83.6%) and marginal ADR drop (-0.2% to US$205). Both markets have benefitted significantly from the surge in mainland tourist arrivals this year, leading to high occupancy levels and enabling hoteliers to drive up rates.
 
The picture in mainland Chinese cities however, was decidedly more mixed. In Guangzhou occupancy climbed 3.1% to 65.0%, but this was offset by a 5.1% drop in ADR (to US$169). Shenzhen experienced the opposite trend, with a strong 9.9% jump in ADR (to US$132) cancelled out by a 9.5% slump in occupancy (to 63.5%).
 
STR Global noted that amount of new room supply coming online in Chinese cities is negatively affecting hoteliers’ ability to drive revPAR.
 
“For the month of October, China reported 67% occupancy and US$111 ADR. Both key performance indicators were below the Asia Pacific average of 71% occupancy and US$136 ADR,” said Elizabeth Randall-Winkle, managing director of STR Global. “Whilst supply growth has slowed across China to 3.5% for year to October, the room stock continued to increase at a higher rate than the regional 2.9%, which negatively impacted the country’s performance.”
 
Source from <Travel Daily Asia>