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Visitors walk through a public cemetery during the Ching Ming Festival in Shanghai, earlier this month. There were signs of a revival in tourist activity during the holiday. Photo: Bloomberg

Hotels in China upbeat over upcoming Labour Day holiday as coronavirus-hit industry sees green shoots of recovery

  • Top hotel chains expect the buoyant demand seen during the recent Ching Ming Festival to translate into stronger bookings during the long weekend next month
  • Signs of early recovery in hotel industry likely to develop slowly, according to data analytic firm STR

After a “significant increase” in room occupancy in China during the tomb-sweeping festival holiday, top hotel chains are looking forward to the upcoming Labour Day weekend, which could bring the coronavirus-stricken industry a step closer to recovery.

During the Ching Ming Festival from April 4 to 6, hotel chains Accor and InterContinental Hotels Group (IHG) saw a significant increase in occupancy levels as nearly all hotels across the country reopened for business.

“We are seeing some demand for hotels return, and some of our hotels even got a full house” over the Ching Ming Festival holiday, said Jolyon Bulley, chief executive of Greater China at IHG.

Hotel occupancy on the mainland has been steadily rising, from a low of 7.4 per cent during the first week of February to 31.8 per cent on March 28, according to data analytics firm STR, which is yet to release figures for the holiday weekend. Around 87 per cent of the mainland hotels in its database were open at the beginning of April, STR added.

Many hotels had closed over the last two months as bookings plummeted after the Chinese authorities imposed sweeping restrictions to contain the outbreak of the deadly Covid-19 disease.

“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 Christine Liu, STR’s regional manager for North Asia.

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One indication that the mainland’s tourism industry is on the mend could be seen from the hordes of tourists at the Huangshan, or Yellow Mountains, in Anhui province in southeast China. Authorities were forced to close the attraction because it exceeded its capacity during the holiday.

Occupancy levels in Accor’s hotels in China also rose during the holiday, as people in the country tested the waters and showed their readiness to travel, said Gary Rosen, chairman and chief operating officer of Accor Greater China.

“The Ching Ming Festival was really that first testing of the waters, because it was a three-day holiday weekend,” said Rosen. “Now we’re going into the May holiday, when people will travel for perhaps three, four or five days. That is the next step.”

The French hospitality group, which operates 387 hotels through its 14 brands in China, including the Ibis and Mercure chains, has already seen an increase in bookings for the Labour Day holiday from May 1 to 5.

Marriott International too saw early signs of recovery during the holiday this month. The holiday “has showed the trendline of gradually recovered short-distance travel and family leisure travel,” said Henry Lee, president of Greater China at Marriott, which operates 377 properties on the mainland.

Although these hotel chains did not reveal the extent of the increase in bookings for the upcoming holiday, a recent survey conducted by leading online travel portal Trip.com and China Tourism Academy showed that mainlanders are eager to unleash their pent-up travel plans.

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About 90 per cent of the 15,000 people polled for the survey said they would like to travel within China this year. Some 16 per cent said May would be the best month to travel provided the virus is brought under control, compared to 15 per cent for the following three months.

“From an investor standpoint, all the indicators are there that the May holiday is going to be an incredible next stage or step in the return to normal,” Accor’s Rosen said. “People [in China] getting back to travel. Because at the heart of it, that is certainly an important part of so many people’s lives.”

Besides the increase in online searches for hotel bookings, Accor has also received enquiries for meeting venues from businesses for the end of the second quarter and third quarter.

“It’s the milestones that we’re crossing that will allow us to predict and have an understanding of what it’s taking to get back to respectable levels of prior pre-coronavirus,” said Rosen.

Hotels have introduced takeaways to shore up revenue as occupancy was hit during the coronavirus outbreak. Photo: Reuters

Meanwhile, the few hotels that were open in China as the coronavirus continued to spread introduced new services to keep their businesses running.

“During this time when people are staying at home or avoiding crowds, many of our hotels in mainland China have launched food takeaways [and] delivery services to meet the increasing needs of residents in neighbouring precincts,” said a spokeswoman for Shangri-La Group.

IHG’s Bulley said that some of IHG’s hotels apart from launching takeaway and food delivery services, have also held online or live-streamed wedding shows, generating positive business results.

“Though no one would be able to tell exactly what will happen when the uncertainties of Covid-19 are not completely gone, we have full confidence that the positive outlook for the hotel industry in Greater China remains unchanged,” said Bulley.

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This article appeared in the South China Morning Post print edition as: Hotels eye holiday recovery boost
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