Market Trends of Hospitality Industry In China
The Rising Demand for Hotels is Driving the Growth of the Market
With rising domestic tourism and corporate travel, as well as the relaxation of Covid-19 limitations, China's hotel sector is still far from saturated and poised for expansion. Despite the pandemic's failures, China's hotel business has enjoyed rapid expansion in recent years, with 3,711 new projects (8% rise year on year) and 704,101 extra rooms (7% increase year on year) in Q1 2022.
It's also worth mentioning that market concentration in the business remains rather strong, with Jinjiang Group, Huazhu Group Limited, and Guangdong (International) Hotel Management Holdings Limited among China's top domestic hotel management brands. Foreign organizations such as InterContinental Hotels Group (IHG) and Shangri-la Hotels and Resorts now dominate the high-end hotel market.
Growing Internet Access and Online Testimonials is Driving the Market
China's burgeoning economy has produced a large middle class looking for services that improve quality of life, which has spawned a growing trend toward more leisure and vacation travel in China. A recent A.T. Kearney consumer study of China's upper middle class-currently comprising 13 million households and projected to grow to 55 million in 10 years-shows that the mainly Chinese prefer self-planned travel over group travel packages. About 70 percent of travelers use online travel sites for information gathering, with 58 percent booking their accommodations on sites such as Qunar.com or Lvmama.com. With China's 500 million-plus Internet users and an ever-increasing demand for individual self-planned tours, online travel sites are important distribution channels for any hotel operator.
The transaction volume of the Chinese online travel booking market amounted to approximately 1.8 trillion yuan, with an annual growth rate of 21.6 percent. The importance of transactions dropped in 2020, the first year of the COVID-19 pandemic, to 987.5 billion yuan but was estimated to grow in 2021 and 2022.
