China Hotel Revenue Growth Accelerated in Late August, Jefferies Reports

China's hotel industry saw an acceleration in revenue growth during late August, with a key performance metric rising 3.6% year-over-year for the week of August 23. The gains were primarily driven by strength in the upscale and luxury segments, according to a Jefferies note analyzing industry data.

Key Performance Metrics

Revenue per available room (RevPAR), a critical measure of hotel profitability, reached RMB 262.3 ($36.20) for the week, according to the Jefferies analysis of STR data. This marks an acceleration from the 3.1% year-over-year increase recorded in the prior week.

The improvement was supported by two key factors:

• Average Daily Rate (ADR): Rose 2.2% year-over-year to RMB 388.7.
• Occupancy: Climbed 1.4% year-over-year to 67.5%.

Upscale and Luxury Segments Lead Gains

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A breakdown of the data reveals a clear divergence in performance across different market tiers, with higher-end hotels outperforming. The budget-friendly sector, in contrast, saw its growth cool significantly.

• Luxury and Upper Upscale: RevPAR increased 3.0% YoY to RMB 530.5, a significant pickup from the 1.7% gain in the previous week.
• Upscale and Upper Midscale: RevPAR advanced 2.7% YoY to RMB 253, also accelerating from a 1.6% rise.
• Midscale and Economy: RevPAR growth slowed to just 0.8% YoY, down from a 2.3% increase the week prior.

Broader Travel Context

Broader travel indicators presented a more mixed picture. Domestic air passenger volume grew 3% year-over-year for the week of August 24, a deceleration from the 6% growth seen previously, according to VariFlight data cited by the Jefferies report.

However, domestic air fares showed some improvement, declining 3% year-over-year to RMB 859.1, compared to a 5% drop in the prior week. In its note, Jefferies stated that it maintains Trip.com as its top pick in the travel and lodging sector, followed by Atour Lifestyle.