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

Published: 5:08pm, 22 Aug 2024

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.

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.

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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