Hotels in China see strong revenue growth

Room revenue growth between 20% and 40% in nine key cities

Four major cities in China saw growth in room revenues of at least 30% in 2011, according to the consultancy firm Horwath HTL. Chengdu saw growth as high as 37%, with Chongqing, Xi’an and Xiamen not far behind. Growth in six other markets – Beijing, Guangzhou, Qingdao, Sanya, Suzhou and Tianjin – increased at rates between 20% and 30%. Shanghai was the only hotel market to see a decrease in room revenue in 2011, but this was mainly because of comparisons with the previous year, when the city hosted the World Expo. Dalian, Hangzhou, Nanjing and Shenzhen scored growth of between 10% and 20%. Nevertheless, the huge number of new rooms in many cities in China is outstripping demand, such as in Chongqing, Tianjin and Suzhou.
“The growth numbers we have seen are truly impressive and indicative of an emerging market in a significant growth phase,” Damien Little, director of Horwath HTL China, said. “Issues of wage inflation and supply concerns are significant challenges to overcome, but having a strong top-line performance will give confidence that these can be addressed.”
[pictured: Chunxi Street, Chengdu]


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