economy
Tourism price wars threaten to dim a rare bright spot in China's consumer spending
China’s domestic tourism is underperforming, with hotel revenues falling as soft demand pressures room rates.
TL;DR
- Hilton China expects revenue per available room (RevPAR) to fall by low single digits this year, worsening from earlier expectations.
- Hotel RevPAR across China has tumbled 6% year-on-year through late July.
- A three percentage point drop in occupancy and a 1% decline in average daily rates contributed to the revenue downturn.
- The decline reflects the fading post-Covid tourism boom amid a broader economic slowdown and sluggish retail sales.
- Consumers are increasingly seeking more unique or premium experiences, with significant price competition evident in popular travel regions.
- Inbound travel is offering some hope, with visa-free policies attracting more visitors from countries with higher per capita income.
- Hyatt reported an 18% increase in U.S. visitors and a 24% increase from Europe into China in the past quarter.
- China's luxury properties saw an 11% increase in revenue in the past quarter, driven by leisure luxury travel.