China hotels double profits

Some of China’s hotels more than doubled their operating profits over 2010, a drastic rise after “hitting rock bottom” in 2009.

According to a Horwath study, all star-rating categories saw a gross operating profit rise over last year, however, three star hotels lead the increase with a 52 percent rise on the prior year.

Despite the strong recovery, Horwath HTL Beijing director Damien Little explained that the growth was not spread evenly across the country and significant growth is still needed in some areas before the increase “could be considered healthy”.

Results from the Annual China Hotel Industry Study 2011 found that among the key trends that have emerged in the Chinese hotel sector over the past five years to 2010, is that the majority of four or five star bookings are made by domestic travellers.

“This significant shift, which has been evident in all corporate, leisure and MICE segments, is reflective of a changing market environment in China,” the report read.

 Over the five years domestic average daily rates (ADR) also increased while foreign demand declined.

The report credited the drop in foreign ADR to the weakness in international demand as well as an oversupply in the market which resulted in price discount.

The report is in its ninth year of publication and studies up to 664 hotels across 138 cities in China.
Source = e-Travel Blackboard: N.J
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