Horwath HTL describes challenges facing the Beijing hotel market now that the Olympics have moved on.
As Beijing residents get back to life after the Olympics, it appears most visitors have taken the first plane out.
Beijing’s hoteliers said goodbye to the majority of their guests just a day after the Games. Hotels across Beijing were only one third full by Tuesday 26 August according to data from STR Global.
During the Games, the average room occupancy across Beijing was 79 percent and remained relatively constant until closing ceremony night, where occupancy was still 75 percent. This dropped suddenly to 42 percent on the first day after the Games and declined further to 33 percent the following day.
Average room rates also recorded a significant decline, dropping from RMB 3,300 on Sunday night to RMB 2,050 by Monday, declining further to RMB 1,340 on Tuesday, the lowest daily average recorded for August.
“We expected there would be a decline in performance following the closing of the Games, but we did not expect that it would be this sudden and this strong” says Damien Little, the Director of Horwath HTL’s Beijing office.
“We were hoping that many tourists would stay on in Beijing to better explore the city, however, it would seem that Beijing might be in for a few tough weeks ahead”.
Connie Yan, STR Global’s China Country Manager says that the sudden market decline has generally been felt across all areas of Beijing and for most of the properties in the market. “Most hoteliers have obviously been aware that this situation was coming given the low amount of bookings on hand for the end of August and start of September.”
However, Ms Yan says that most hoteliers have a strong outlook for the last quarter of 2008 with a number of large events hitting the city and the return of corporate travelers and domestic leisure guests.
Mr. Little says Beijing hoteliers need to look beyond this short-term problem of the market and appreciate the long-term benefits that the city will be able to take away from the Olympic Games – such as the significant improvements to Beijing’s transportation infrastructure.
“It would be fair to say the world has a new perception of Beijing and China through the global coverage of the Games,” says Mr Little. “And those who came for the Games would have experienced first hand the vastly improved quality of Beijing’s hotel stock.”
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Ms Michelle Xie
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