Hotels & Hospitality Group June 2014 Hotel Destinations China
Welcome to the inaugural edition of our Hotel Destinations China publication, a biannual overview providing a snapshot of key hotel markets within Mainland China. As you browse through this guide, you will find a selection of notable hotel trends, recent transactions, upcoming new projects and a summary of key market statistics for each destination. We trust you will find this publication relevant, concise and insightful. Enjoy the read and look out for the next edition in 2H 2014! Scott Hetherington Chief Executive Officer, Asia JLL Hotels & Hospitality Group Corinna Toh Executive Vice President, Asia JLL Hotels & Hospitality Group
Hotel Destinations China 03 Contents 04 City Profiles 04 Beijing 05 06 Guangzhou 07 Nanjing 08 Sanya 09 Shanghai 10 Tianjin 11 Wuhan 12 Quick Facts Contributors 13
04 Hotel Destinations China Beijing Beijing is the nation s capital as well as the political and cultural heart of Mainland China. Its history dates back three millennia, making it a key leisure destination with a strong cultural offering. Beijing is also a strong conference market, ranking as one of the top Meetings, Incentives, Conventions and Exhibitions (MICE) destinations in the world. The growth of the city s hotel industry hasn t stopped since the 2008 Olympic Games. By 2015 the city will have opened more than 14 subway lines. In addition, authorities announced 126 new projects last year that will see the further upgrading of this booming urban landscape. H2 2013 HIGHLIGHTS Tourism Demand Supply Outlook International visitor arrivals showed a decrease of 10.1% to 4.5 million tourists in 2013. Positive annual growth has only been recorded in the months of January and October 2013. The composition of major source markets of international visitors has recorded no change in recent months, with USA ranking first, followed by South Korea and Hong Kong. Notably, the number of tourists from Japan has declined remarkably by 43.1%, due to the intense political relationship with Mainland China in recent times. New supply over the second half of 2013 has been minimal. Four new hotels opened in the first quarter of 2014, totalling 1,208, and a further 12 hotels are projected to open in the short term, adding another 3,026 over the balance of 2014. According to our research, approximately 26 new hotel projects have been proposed, which could potentially result in an additional 7,500 by 2016. Beijing tourism market is forecasted to improve over the next few years due to rising domestic tourism demand and also a greater number of MICE and major international conferences, such as APEC and the Global Software Development conference, bringing more international MICE tourists to Beijing. NEW HOTELS NOTABLE HOTEL DEALS There were no hotel transactions during H2 2013 310 Holiday Inn Beijing Yanqing Resort 309 New World Hotel Beijing Chongwenmen UPCOMING HOTELS Crowne Plaza Beijing Lido Beijing Marriott Hotel Central Wanda Realm Beijing Holiday Inn Express Beijing Yizhuang Waldorf Astoria Beijing QUICK FACTS 4.5 million International Visitor Arrivals 619 Number of New Rooms 59.1% Occupancy 939 Average Daily Rate (ADR) 555 Revenue per Available Room (RevPAR) Note: Beijing Hotels refers to 5-Star only. Source: STR Global (YTD Mar 2014), Real Capital Analytics, Beijing Tourism Bureau, JLL. y-o-y year-on-year, ADR - Average daily rate, RevPAR - Revenue per available room.
Hotel Destinations China 05, the capital city of Sichuan province, is an important economic, transportation, and communication centre in western China. With a long history, heritage, culinary and tea culture, attracts an increasing share of domestic and international leisure tourists. As one of the cities with fastest economic growth rate in Mainland China, was chosen as a top investment destination according to the American Chamber of Commerce. continues to be identified as one of the fastest growing cities. gained the world s attention after holding the Fortune Forum in 2013. In addition, the city was named among the top five most liveable cities in Mainland China by a recent countrywide survey. H2 2013 HIGHLIGHTS Tourism Demand Supply Outlook In 2013, total visitor arrivals rose to 155 million tourists, a 26% y-o-y increase. International visitor arrivals recorded an annual growth rate of 10.7%, reaching 1.7 million. Corporate demand is increasing at a substantial pace with a number of international organisations opening offices, branches, or operation centres, as well as the wider growth in Meetings, Incentives, Conventions and Exhibitions (MICE). Tourism strategies have been a focal point of the city s overall development plan, as was named as one of the nation s first cities for comprehensive tourism reforms. The government is continually working to improve tourism management, policies and services to meet the growth in inbound visitors. There has been a significant increase in new hotel developments to meet the growing number of inbound tourists. Approximately 23 new hotel projects are proposed, which could potentially result in an additional 7,212 over the short to medium term. s strong economic development is anticipated to draw the attention of corporations, investors, tourists and international hotel operators. Recently, more than 70 new international air routes have commenced to. As a result, the tourism market is estimated to grow in 2014 both in corporate and leisure demand. NEW HOTELS NOTABLE HOTEL DEALS There were no hotel transactions during H2 2013 361 Felton Gloria Grand Hotel 353 The Ritz-Carlton, 348 Crowne Plaza Gaoxin 342 Howard Johnson Three Gorges Plaza 290 Mercure 290 196 M Hotel UPCOMING HOTELS InterContinental Global Centre Palm Springs Fairmont Hotel Howard Johnson Youwei Evason Resort Hotel Dujiangyan Six Senses Diaoyutai Hotel QUICK FACTS 1.7 million International Visitor Arrivals 1,890 Number of New Rooms 47.2% Occupancy Note: Hotels refers to 5-star only. Source: STR Global (YTD Mar 2014), National Tourism Bureau, JLL. y-o-y year-on-year, ADR - Average daily rate, RevPAR - Revenue per available room. 895 Average Daily Rate (ADR) 422 Revenue per Available Room (RevPAR)
06 Hotel Destinations China Guangzhou A key first-tier city of Mainland China, Guangzhou is a national transportation hub and trading port. It is the third largest city nationally after Beijing and Shanghai, with a population of more than 12 million. Guangzhou is the main manufacturing hub of the Pearl River Delta - one of Mainland China s leading commercial and manufacturing regions, and has several industrial zones; hence corporate tourism demand is robust in this city. Guangzhou also offers a wide variety of tourist attractions, such as museums and historical landmarks which attract both international and domestic tourists. H2 2013 HIGHLIGHTS Tourism Demand Supply Outlook In 2013, tourist arrivals to Guangzhou were recorded at 50.4 million, growing by 4.8% y-o-y. International tourist arrivals decrease by 3.0% to 7.7 million and domestic tourist arrivals increased at 6.4% to 42.7 million. Tourists from Hong Kong form the majority of international arrivals, accounting for more than half of total arrivals based on data released in 2012. Guangzhou is a gateway to Hong Kong and Macau. Corporate demand to Guangzhou was traditionally a major component of inbound tourism but in recent years, shopping, entertainment and new resorts have attracted more leisure visitors. Seven hotels are projected to enter the market in 2014, adding 1,915 to the city. The city s continued bilateral business ties with global cities will continue to see the growth of inbound corporate demand, thus supporting the increase in new supply. The Guangzhou tourism market is anticipated to grow. Domestic visitor arrivals are likely to increase as Guangzhou will hold 26 international and national sports events in the coming years. Guangzhou plans to expand its city area from 2014 onwards. NEW HOTELS NOTABLE HOTEL DEALS There were no hotel transactions during H2 2013 500 320 Langham Place, Pazhou Langham Place, EDZ, Guangzhou UPCOMING HOTELS DoubleTree by Hilton Guangzhou Aloft Guangzhou, University Park Holiday Inn Guangzhou Science City Park Hyatt Guangzhou QUICK FACTS (2013) 7.7 million International Visitor Arrivals (H2 2013) 820 Number of New Rooms 65.4% Occupancy 883 Average Daily Rate (ADR) 577 Revenue per Available Room (RevPAR) Note: Guangzhou Hotels refers to 5-star only. Source: STR Global (YTD Mar 2014), Guangzhou Statistics Bureau, JLL. y-o-y year-on-year, ADR - Average daily rate, RevPAR - Revenue per available room.
Hotel Destinations China 07 Nanjing As the capital city of Jiangsu province in eastern China, Nanjing is a prominent city with a strong history located on the south bank of the Yangtze River. As one of the four ancient cities in Mainland China, Nanjing is commonly viewed as a city of culture and leisure destination for tourists. Nanjing was formally the capital city of several key dynasties in ancient Chinese history. Nanjing is also known for its lush green parks, natural scenic lakes and favourable climate, attracting international tourists throughout the year. H2 2013 HIGHLIGHTS Tourism Demand Supply Outlook In 2013, domestic visitor arrivals recorded a moderate increase of 9.1% to 86.7 million, however, international visitor arrivals encountered a decline of 6.6% to 0.5 million. Nanjing s Lukou International Airport is about 35 km from the city centre and serves inbound international flights from Japan, Korea, Thailand, Malaysia, Singapore and Germany. Leisure tourists travel to Nanjing for its history, relics, landmarks and cultural heritage. Since Nanjing has a long history of manufacturing and is among the top five economic cities in Mainland China with a growing tertiary industry, corporate demand to Nanjing has the potential to realise strong growth in future years. New supply over H2 2013 was minimal, however, there will be six new major hotel openings adding approximately 2,439 in 2014. Based on our research, a further five hotels are proposed to open between 2015 and 2017, totalling 1,444. Nanjing s tourism industry has experienced lower inbound tourist demand due to the lack of local organisations promoting the city to foreign tour groups. More recently, the government has taken measures to promote tourism, along with upcoming international events, such as the Youth Olympic Games in 2014. NEW HOTELS NOTABLE HOTEL DEALS There were no hotel transactions during H2 2013 423 Crowne Plaza Nanjing Jiangning 371 302 Fairmont Nanjing Wanda Realm Nanjing Jiangning UPCOMING HOTELS Shangri-La Hotel Nanjing Grand Hyatt Nanjing Howard Johnson Plaza Tangshan Angsana Tangshan QUICK FACTS (2013) 0.5 million International Visitor Arrivals (H2 2013) (2013) 1,096 Number of New Rooms 67.0% Occupancy (2013) (2013) 716 Average Daily Rate (ADR) 479 Revenue per Available Room (RevPAR) Note: Nanjing Hotels refers to 5-Star only. Source: Nanjing Tourism Bureau, JLL. y-o-y year-on-year, ADR - Average daily rate, RevPAR - Revenue per available room.
08 Hotel Destinations China Sanya Sanya, located in the southernmost tip of Mainland China, is renowned for its tropical climate and beautiful scenery. Sanya is one of the three prefecture-level cities of Hainan. In recent years, the city has developed into a popular tourist destination attracting leisure visitors from all over the world. There has been a significant increase in hotel developments with a strong pipeline of new supply set to enter the accommodation market over the medium term. Air links are served by Sanya Phoenix International Airport and the Hainan East Ring Intercity Rail operates along the east coast of Hainan to connect Sanya and Haikou. H2 2013 HIGHLIGHTS Tourism Demand Supply Outlook International visitor arrivals reached 0.5 million in 2013, recording a slight decline of 0.3% from 2012. Domestic visitor arrivals experienced a 12% increase as at YTD Oct 2013 according to the Sanya Statistics Bureau. Recently, an increasing number of MICE events have taken place, boosting corporate travel. Sanya, as a seaside location, is essentially a destination for domestic leisure tourism and continues to compete with regional resort locations such as Thailand and Bali. Inbound Russian tourism has increased recently with the availability of high quality accommodation options. A substantial pipeline of new hotel development exists in Sanya. According to our research, there are 24 new hotel projects scheduled to open in 2014, adding an estimated 8,361 to the accommodation market. Tourism in Sanya is forecast to record steady growth from domestic travellers whilst international visitation will be boosted by MICE events, such as the Global Travel and Tourism Summit which was held in April 2014. NEW HOTELS NOTABLE HOTEL DEALS There were no hotel transactions during H2 2013 480 The Westin Sanya Haitang Bay Resort 350 299 InterContinental Sanya Haitang Bay Resort Raffles Resort Sanya Qingshui Bay - Phase I UPCOMING HOTELS Fairmont Haitang Bay Resort Outrigger Qingshui Bay Resort Hilton Hainan Clearwater Bay Resort Wyndham Sanya Grand Hyatt Shenzhou Peninsula QUICK FACTS 0.5 million International Visitor Arrivals 1,129 Number of New Rooms 68.1% Occupancy 1,045 Average Daily Rate (ADR) 711 Revenue per Available Room (RevPAR) Note: Sanya Hotels refers to 5-star only. Source: STR Global (YTD Mar 2014), Sanya Statistics Bureau, JLL. y-o-y year-on-year, ADR - Average daily rate, RevPAR - Revenue per available room.
Hotel Destinations China 09 Shanghai Shanghai is one of the largest cities in Mainland China, a global financial centre and a major transport hub with the world s busiest container port. Shanghai has a rich collection of buildings and structures of various architectural styles. The Bund, located by the bank of the Huangpu River, contains early 20th-century development. The Pudong district of Shanghai displays several skyscrapers, many of which are ranked among the tallest in the world. Shanghai s infrastructure has been upgraded over the past few years with new roads, bridges, tunnels and airport terminals. The city enjoys its fair share of both corporate and leisure tourism. H2 2013 HIGHLIGHTS Tourism Demand Supply Outlook According to the Shanghai Municipal Tourism Administration, international visitor arrivals to Shanghai in 2013 reached 7.6 million, which was 5.4% below 2012. Tourism receipts from the popular 7-day National Day Golden Week in October 2013 reached 7.5 billion, bringing a 21.4% y-o-y increase from the previous year. Shanghai s key source markets remain unchanged: Japanese tourists rank first, followed by South Korea and the USA. Leisure, corporate and Meetings, Incentives, Conventions and Exhibitions (MICE) demand to Shanghai remains strong. However, Shanghai hotels continue to face challenges due to the government austerity measures. There were three hotel openings in H2 2013. There will be a significant number of added to the Shanghai hotel market this year. Four hotels opened during Q1 2014, totalling 1,148. Our research shows a pipeline of more than 15 hotels (over 4,600 ) which are likely to enter the market in the short term. An increase in hotel development has been noted prior to the completion of Shanghai Disney Resort. Corporate demand to Shanghai will continue to be promoted on the back of the Free Trade Zone and its major financial hub status. NEW HOTELS NOTABLE HOTEL DEALS Marriott Executive Apartments 2,386 mill Shanghai JC Mandarin Hotel 2,118 mill Galaxy Hotel 1,263 mill 3961 Caoan Rd 59 mill Regal Jinfeng Hotel 600 mill UPCOMING HOTELS Sheraton Jiading Hotel Pullman Shanghai South Shanghai Marriott Hotel Parkview Crowne Plaza Shanghai Noah Square Hyatt Regency Shanghai Chongming 686 Pudong Kempinski Hotel (Rebranded) QUICK FACTS (2013) 7.6 million International Visitor Arrivals 520 Jing An Shangri-La (H2 2013) 1,567 Number of New Rooms 361 Holiday Inn Shanghai Hongqiao 58.2% Occupancy Note: Shanghai Hotels refers to 5-star only. Source: STR Global (YTD Mar 2014), Real Capital Analytics. Shanghai Municipal Tourism Administration, JLL. y-o-y year-on-year, ADR - Average daily rate, RevPAR - Revenue per available room. 1,014 Average Daily Rate (ADR) 590 Revenue per Available Room (RevPAR)
10 Hotel Destinations China Tianjin Located in northern China, Tianjin - one of the four direct-controlled municipalities of Mainland China, is a leader in transportation, shipping and logistics. As an important industrial city from the 19th century, Tianjin has a well-developed manufacturing sector which continues to boost the city s local economy. Furthermore, Tianjin is the permanent host city of the Summer Davos Forum. Hence, corporate demand to Tianjin accounts for a major component of overall inbound visitors. Tianjin, once home to foreign concessions in the late Qing Dynasty and early Kuomintang era, is also famous for its folk arts, cultural relics and architecture. H2 2013 HIGHLIGHTS Tourism Demand Supply Outlook International visitor arrivals recorded a strong increase in 2013, reaching 2.6 million, (up 13% from 2012 and doubling that of 2007). The dense network of ex-concession streets south and west of the central train station, and south of the Hai River, now constitute the areas of interest to leisure visitors. The Davos Forum boosts corporate demand to Tianjin significantly. In 2009, at the height of the global financial crisis, growth in tourist arrivals still achieved 15.6% due to the large inflow of corporate demand brought by the forum. Since Tianjin is located near Beijing, the number of tourist arrivals has a strong correlation with potential to increase in the medium to long term. In 2014, 12 major hotels are set to open offering 4,789 to the Tianjin hotel market. There are another 16 hotels proposed to open from 2015 onwards, totalling 4,844. Meetings, Incentives, Conventions and Exhibitions (MICE) tourism is likely to improve due to the increase in participants who come for the annual Davos Forum. Additionally, several leisure tourism festivals aimed at promoting visits to Tianjin will be held in 2014, potentially increasing tourism arrivals in the long term. NEW HOTELS NOTABLE HOTEL DEALS There were no hotel transactions during H2 2013 297 Wanda Vista Tianjin 280 The Ritz-Carlton, Tianjin UPCOMING HOTELS Hilton Tianjin Binhai Wyndham Tianjin Binhai Hyatt Regency Tianjin DoubleTree by Hilton QUICK FACTS (2012) 2.6 million International Visitor Arrivals 577 Number of New Rooms 52.0% Occupancy (2012) (2012) 541 Average Daily Rate (ADR) 296 Revenue per Available Room (RevPAR) Note: Tianjin Hotels refers to 5-star only. Source: Tianjin Tourism Bureau, JLL. y-o-y year-on-year, ADR - Average daily rate, RevPAR - Revenue per available room.
Hotel Destinations China 11 Wuhan The most populated city in central China, Wuhan, is recognised as a political, economic, financial and cultural centre of central China. Located along the Yangtze River, Wuhan is a major transportation hub. With a 3,500-year long history, Wuhan is one of the most ancient and civilized metropolitan cities in Mainland China, older than Beijing, Xi an and Nanjing. Its major industries include optic-electronic, automobile manufacturing, steel manufacturing, new pharmaceutical sector, biology engineering, new materials industry and environmental protection. H2 2013 HIGHLIGHTS Tourism Demand Supply Outlook Based on latest available data, in 2013, international visitor arrivals rose to 1.6 million tourists, recording a 7.0% y-o-y. The Yellow Crane Tower is one of the popular tourist attractions in Wuhan. With Wuhan s strong economic and manufacturing base, the majority of inbound visitors are business travellers. Wuhan held the International Tourism Festival in 2013, drawing a large number of visitors and promoting local tourism. Wuhan is attracting a growing share of foreign investment as well as overseasfunded enterprises. Wuhan s hotel market has witnessed an increasing share of new supply entering the market to cater to corporate travellers. In 2013, 1,748 were added to the hotel market. In 2014, 4,135 new are expected to complete. The Wuhan tourism market is anticipated to grow over the next few years, underpinned by a strengthening corporate sector. With recent tourism promotions in place to promote Wuhan to the wider Chinese domestic leisure market, as well as a location for international businesses to conduct operations, visitor arrivals are likely to witness longer term growth. NEW HOTELS NOTABLE HOTEL DEALS There were no hotel transactions during H2 2013 570 Hilton Wuhan Optics Valley 409 Wanda Realm Wuhan 332 The PUYU hotel & Spa UPCOMING HOTELS Sheraton Wuhan Fanhai Wanda Reign Wuhan Wuhan Joya Hotel QUICK FACTS 1.6 million International Visitor Arrivals 1,568 Number of New Rooms (2013) 66.9% Occupancy (2013) (2013) 839 Average Daily Rate (ADR) 561 Revenue per Available Room (RevPAR) Note: Wuhan Hotels refers to 5-Star Hotels. Source: Wuhan Tourism Bureau, JLL. y-o-y year-on-year, ADR - Average daily rate, RevPAR - Revenue per available room.
12 Hotel Destinations China Quick Facts Quick Facts INTERNATIONAL VISITOR ARRIVALS NUMBER OF NEW ROOMS OCCUPANCY AVERAGE DAILY RATE (ADR) REVENUE PER AVAILABLE ROOM (REVPAR) Beijing 4.5 million 619 59.1% 939 555 1.7 million 1,890 47.2% 895 422 Guangzhou 7.7 million 820 65.4% 883 577 Nanjing 0.5 million 1,096 67.0% 716 479 (2013) (2013) (2013) Sanya 0.5 million 1,129 68.1% 1,045 711 Shanghai 7.6 million 1,567 58.2% 1,014 590 Tianjin 2.6 million 577 52.0% 541 296 (2012) (2012) (2012) Wuhan 1.6 million 1,568 66.9% 839 561 (2013) (2013) (2013)
Hotel Destinations China 13 Contributors Corinna Toh Executive Vice President Asia corinna.toh@ap.jll.com Frank Sorgiovanni Vice President, Research Asia frank.sorgiovanni@ap.jll.com Charles Ye Senior Associate Shanghai charles.ye@ap.jll.com Monica Wang Analyst monica.wang@ap.jll.com
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