Core Insights - The hotel prices in major Chinese cities have significantly declined, with many budget and mid-range brands experiencing price drops of over 10%, and some exceeding 20% [6][10][16] - The average daily rate (ADR) for Atour Hotels has fallen below levels seen five years ago, with a reported decline of 19% in the Beijing area [10][11] - The hotel market is facing a supply-demand imbalance, leading to decreased occupancy rates and revenue per available room (RevPAR) across various hotel brands [14][15] Price Trends - From August 1 to September 1, 2023, hotel prices in Beijing, Shanghai, Guangzhou, and Shenzhen showed a general downward trend, with 9 out of 10 observed hotel brands reporting average price declines [6][8] - Economic and mid-range hotel brands were the most affected, with brands like Home Inn and Hanting experiencing price drops of 27.2% and 24.1%, respectively [6][7] - High-end brands like Sheraton showed more stability, with a price drop of only 8%, while Hilton was the only brand to see a price increase of 3.5% [7] OTA Price Variations - Price fluctuations among different Online Travel Agencies (OTAs) were notable, with Ctrip offering the lowest average prices in Beijing at 572.9 yuan, while Tongcheng had the highest at 594.2 yuan [8][9] - In the transition to the off-peak season, Ctrip's prices dropped significantly by 13% to 498.4 yuan, while Qunar also saw a decline of 12.5% [9][18] Atour Hotel Performance - Atour's ADR for Q1 2025 was reported at 418 yuan, lower than the 429.5 yuan seen in 2019, indicating a downward trend in pricing [10][11] - The company's RevPAR has also declined, with a 7.3% year-on-year drop reported for Q1 2025 [10][11] Market Dynamics - The hotel market is experiencing a supply expansion that outpaces demand recovery, leading to lower occupancy rates and increased pressure on pricing [14][15] - The average occupancy rate for five-star hotels fell to 58.25% in Q2 2024, reflecting the challenges faced by the industry [15] Regional Observations - In Beijing, the average hotel price dropped by 13.5%, with significant declines in brands like Orange Crystal and Home Inn [16] - In Shanghai, the average price fell by 14.6%, with Vienna experiencing a notable drop of 28.1% [16] Future Outlook - The hotel industry is expected to face continued challenges, with predictions of a decline in RevPAR for Q3 2024, although the rate of decline may be less severe than in Q2 [14]

Summary of Hotel and Tourism Industry Conference Call Industry Overview - The hotel industry during the 2024 May Day holiday exceeded expectations, driven by long holiday opportunities leading to increased inter-provincial and long-distance travel, particularly in lower-tier cities. Coastal cities showed better performance compared to last year, and the 144-hour visa-free transit policy boosted foreign tourist numbers. Hotel prices, including those of Huazhu and Jinjiang, saw approximately a 10% increase [1][4][25]. Key Insights - **Performance by Hotel Tier**: Different tiers of hotels showed varied performance during the holiday. High-end hotels experienced significant growth in occupancy rates, while mid-range hotels saw increases in both price and traffic. Economy hotels had relatively smaller increases [1][5]. - **RevPAR Growth**: During the 2024 May Day period, Huazhu's RevPAR was 110.3 RMB, and Jinjiang's was 118.4 RMB, both showing over 10 percentage points growth compared to the previous year. This growth suggests a potential similar trend for Q2 and raises expectations for summer data [1][6][7]. - **Regional Performance**: The Southwest and South China regions performed particularly well, while the Northwest region, except for Xinjiang, showed weaker results [2][4]. Additional Important Points - **Government Initiatives**: The government is considering issuing accommodation vouchers through OTA platforms to stimulate tourism and related services, expected to launch before the summer [3][25]. - **Supply Dynamics**: Huazhu plans to open 2,400 new stores in 2025, focusing on lower-tier markets, while Jinjiang's pace is slower with fewer than 300 new openings. The overall slowdown in supply growth is seen as positive for the chain hotel market [12][13]. - **Business Travel Trends**: Business travel demand remained stable in April, with Huazhu's demand holding steady year-on-year, while Jinjiang experienced a decline due to first-quarter reforms [10][11]. - **Market Outlook**: The overall hotel industry is expected to remain flat or decline by 1-2% in 2025, with Jinjiang projected to decline by about 5% and Yaduo by 2-3% [21]. Conclusion - The hotel industry is experiencing a positive trend driven by increased travel demand and government support. However, the performance varies significantly across different hotel tiers and regions. The supply dynamics and business travel trends will play a crucial role in shaping the industry's outlook for the coming months.