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The hospitality industry in China has been growing significantly and is forecast to continue growing in the future as well, owing to high population, majority of the people preferring domestic travel, and the rising number of international visitors. The growing economy is also encouraging domestic travel and the government is boosting holiday travel by releasing holiday travel restrictions and introducing a five-day work week, aiming at longer vacations. The efforts by the government are yielding expected benefits, as domestic tourism contributed around USD 1.47 trillion to the GDP in 2018. Many international hotel brands and their chains continued to expand in China, while the domestic brands are focusing on expanding their footprint through mergers and acquisitions. The government has introduced the Greater Bay Area Plan and the Belt and Road Initiative, to bring in higher demand for luxury hotels in the country.

Key Market Trends

To Meet the Rising Demand in China, the Total Number of Hotels are Increasing

With the increasing demand for domestic and international tourism, the total number of hotels in China are rapidly increasing. China accounted for more than 20,000 hotels in 2018, which was almost double the number of hotels that the country had in 2008. The country had around 10,200 hotels that belonged to both domestic and international brands and their chains, back in 2008. The total number of hotel rooms in China accounted for around 2.2 million units in 2008, which almost doubled to around, 4 million units, in 2019.

Guangdong is the Highest Revenue Generator for the Industry

Guangdong accounted for the highest number of hotels in 2018, which was more than 2,300 units, and it is generating a revenue of more than CNY 55 billion for the hospitality industry. The capital city, Beijing, and its surrounding regions have more than 900 hotels and have yielded the second-highest revenue, having recently accounted for CNY 42.14 billion. Zhejiang, Shanghai, Jiangsu, and Fujian are followed by the leading regions and are generating around CNY 33 billion, CNY 30 billion, CYN 24.9 billion, and CNY 24.07 billion, respectively.

Competitive Landscape

The rising younger generation is reshaping the hospitality industry in China. This influential generation is driving the domestic travel market, which accounts for a great share in the hospitality industry. In order to cope with the preferences of the millennial population, the key players in the hospitality industry are opting for technological upgrading of their properties, throughout the country. InterContinental Hotels Group has teamed up with Baidu and is introducing artificial intelligence-supported smart rooms in China. Likewise, Marriott International also teamed up with China’s Alibaba Group Holding, to launch facial recognition technology for check-ins.

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