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China revenues drop for high-end hotel chains as business travel, consumer spending dip

  • Wyndham, IHG, Hilton, Marriott, Hyatt and Accor have reported declines in revenue for their China operations as business travel and overall demand slow

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International hotel chains have reported reduced business in China as consumers remain cautious and domestic competition intensifies. Photo: Handout
Softening demand for business travel, fiercer competition and a scale-down in consumer spending have all had a hand in lower prices for the China operations of several of the world’s largest hotel chains, a trend the companies have confirmed in their quarterly results reports and earnings calls.
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Six international chains operating in China during the second quarter all registered a year-on-year decrease in revenue per available room (RevPAR) and average daily rate – two important metrics for hotel profitability – with China the only major market reporting negative trends for both figures.

Among the chains, Wyndham saw the largest decline in RevPAR with a drop of 17 per cent, while IHG saw a 7 per cent decline. Hilton, Marriott, and Hyatt all recorded drops ranging from 3 to 5 per cent, with Accor also logging negative growth.

In terms of average daily rate, Marriott, IHG and Hyatt each reported decreases of around 5 per cent.

Zhou Mingqi, founder of tourism consultancy Jingjian Consulting, said high-end international hotel chains primarily catering to business travellers have faced significant challenges this year due to a reduction in the volume and expense of corporate travel.
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Executives from Marriott, Hyatt and Accor attributed the decline in performance to a slowing Chinese economy and more tepid consumer spending on their respective earnings calls.

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