China’s hospitality sector anticipates a 4.3% growth in midscale and premium hotel signings in 2024, driven by a resurgence in domestic travel and consumer confidence. Upscale hotel segments are seeing significant expansion, particularly in major metropolitan areas. Moreover, a trend towards the franchise model and the rise of compact properties signal a shift in investment strategies within the industry.

In 2024, China’s hospitality sector displayed notable recovery, evidenced by a 4.3 percent increase in midscale and premium hotel signings. This resurgence, fueled by a rebound in domestic travel and improved consumer confidence, indicates a burgeoning demand for high-quality accommodations across prominent urban and leisure destinations. This trend highlights an optimistic future for a hotel industry increasingly catering to discerning travelers seeking exceptional experiences.

The uptick in upscale hotel properties, characterized by lower brand saturation, presents significant expansion prospects. This segment saw a remarkable year-on-year growth of 24.6% in new hotel signings, driven by investor initiatives to enhance asset value, operational performance, and overall product quality. Key metropolitan areas led the signing activities, surpassing less populated markets that experienced declines during the same timeframe.

Tourism-centric locations have continued on a growth trajectory as evidenced by the addition of 188 new hotel signings—a 37% increase compared to the previous year—building upon momentum from 2023. Over the past five years, hotels with fewer than 150 rooms have increasingly gained prominence, now accounting for 64% of all new deals, including a notable rise in compact properties within the luxury and ultra-luxury segments.

While newly built hotels constitute 70% of the ongoing projects, there is a notable shift towards adaptive reuse and renovation endeavors, particularly in top urban centers. These projects represent 37% of signings in first-tier cities and 27% in emerging urban hubs classified as “new first-tier”. The 2024 market reveals a shift in preference towards the franchise model, which now comprises 73% of signings, while the prevalence of traditional management contracts has dropped significantly from 47% in 2020 to only 26% in 2024.

Overall, the hospitality sector indicates a revival in premium accommodations, robustness in the upper midscale category, a growing interest in repurposing existing properties, and an increasingly focused approach to hospitality investments.

In summary, China’s hospitality sector is demonstrating considerable growth in 2024, highlighted by a 4.3 percent increase in midscale and premium hotel signings. The recovery in domestic travel and rising demand for quality accommodations signal a positive trajectory for the industry. The shift towards franchises and a diversification of property formats underscore a strategic evolution within the sector, encouraging not only new constructions but also renovations and repurposed projects to serve an expanding market of discerning travelers.

Original Source: www.travelandtourworld.com

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