looking beyond covid-19: hotels – in for the extended stay in china
apr 27, 2020
shanghai, april 27, 2020——according to cushman & wakefield’s recent report - looking beyond covid-19: hotels – in for the extended stay in china, during the peak time of the covid-19 outbreak, the tourism industry in china suffered greatly from the travel restrictions imposed to stop the spread of the virus. with tourists not being able to travel, hotels in the country were facing unprecedented pressure due to a fall in bookings and resulting low occupancy rates.
since the lockdown has been lifted in many parts of the country, business activity in china’s hospitality industry has begun to pick up. according to str, as of 11 april, hotel occupancy in china has climbed above the 30.0% mark, up from a low of 7.4% during the first week of february.
china hotels – daily occupancy (1 january-11 april 2019/2020)
source: str, cushman & wakefield research
sample hotels in china now back in operation (1 april 2020)
source: str, cushman & wakefield research
from a property perspective, and stirred by the impact of covid-19, both short- and long-term plans will have to address many issues, but three important issues which hotel operators in china have considered/could consider are:
hotel building health and safety;
adopting and implementing smart building technology, and;
a renovation/repositioning of the property asset.
short-term plan – hotel building health and safety
as covid-19 first began to gain a footing in china, many hotel operators in the country quickly took steps to ensure hotel building health and safety levels were strengthened, in an effort to combat the spread of the virus.
long-term plan – a smart hotel
in recent years, with the rapid development of technology, hotel guests in china have increasingly demanded new types of efficient and convenient hotel services which feature high-tech solutions.
with the advent of covid-19, the need for smart hotels may now have extra impetus. efficiency and convenience will still continue to be driving forces for change, but now so will hotel building health and safety enhancement, and smart technology can assist in this.
long-term plan – hotel property asset renovation/repositioning
given the impact of covid-19 and the subsequent cash flow difficulties some hotels are now struggling with, from a business perspective, some hotel property owners in china may wish to sell their property asset. others, however, may decide to stick with it and work with their hotel operator and third-party consultants to renovate/reposition the property asset to augment market competitiveness and ensure future business growth.
under a renovation/repositioning scheme, much will need to be considered, including:
competitor response stratagems;
the characteristics of customer needs;
guest service standards to be adopted and implemented;
the theme and standard of renovation, and;
the branding of the hotel going forwards.
when considering the renovation/repositioning of the hotel asset from a real estate point of view, it will also be very important for hotel owners to understand the fundamental current supply and demand dynamics, and the longer-term trends of the hotel property market in the hotel’s locality.
apart from the hotel property market dynamics, many other factors to support hotel business growth will also need to be considered by hotel property owners contemplating a renovation/repositioning of their property asset. some selected factors to consider include:
the current and future tourist spending power and tourist visitor numbers to the locality;
the current and future growth of the locality’s service sector;
the current and future tourism development in the locality;
the important sporting, tourism, cultural, trade and business events held/to be held in the locality;
the current and future staycation activity in the locality;
the current and future urbanisation and urban development in the locality;
the current and future transportation infrastructure projects in the locality;
the current and future level of urban renewal activity in the locality, and;
the future trends for hotel properties specifically.
from a property perspective, the last factor, the future trends for hotel properties, is critically important. not fully understanding the trends could make or break the renovation/repositioning of the project. when considering the future trends, there are again many aspects to consider, but two important ones to think about are:
design, and;
hotel construction and fitout quality.
in for the extended stay
shaun brodie, head of occupier research, greater china, cushman & wakefield, said : “further on, once there is a full resumption in tourism and business travel, then hospitality business activity in china will begin to reach normality. only when this normalisation in business activity is achieved will hotel owners and operators in china be in a position to fully appreciate the much longer-term business opportunities to be had from continuing to actively participate in the hospitality industry in china, given the expected growth in business travel and tourism. when the wider future outlook is fully realised, we expect many more hotel owners and operators to take a longer-term view and to be in for the extended stay when it comes to doing business in the hospitality industry in the future in china.”
the world’s biggest tourist destinations in 2030
note: number of estimated arrivals in 000s
source: euromonitor international, cushman & wakefield research
please click here to download the report
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about cushman & wakefield
cushman & wakefield (nyse: cwk) is a leading global real estate services firm that delivers exceptional value for real estate occupiers and owners. cushman & wakefield is among the largest real estate services firms with approximately 53,000 employees in 400 offices and 60 countries. across greater china, there are 22 offices servicing the local market. the company won four of the top awards in the euromoney survey 2017 and 2018 in the categories of overall, agency letting/sales, valuation and research in china. in 2019, the firm had revenue of $8.8 billion across core services of property, facilities and project management, leasing, capital markets, valuation and other services. to learn more, visit www.cushmanwakefield.com or follow @cushwake on twitter.
for further information, please contact:
mandy qian
director, marketing & communications, greater china
tel: 86 10 8519 8040
mandy.qian@cushwake.com
