Cushman & Wakefield today released its Hotels — Checking Out Boutique Neighborhood Hotels in Mainland China report.
The General Hotel Market
Mainland China Domestic Tourism
According to the latest data released by the National Bureau of Statistics (China) and the China Tourism Academy, as of the first half of this year, the total number of domestic tourists reached 2.384 billion. This was an increase of 929 million when compared to the same period last year and represents an annual growth of nearly 64%. Amongst this group of people, approximately 1.859 billion visits were undertaken by urban residents, and approximately 525 million visits were undertaken by rural residents, showing year-on-year (y-o-y) increases of 70% and 44%, respectively.
Mainland China All-Star Hotels Performance
Looking at hotel market business performance, in the second quarter of 2023, the average room rate for mainland China's all-star hotels already surpassed the market business performance seen during the pre-pandemic period, reaching RMB373.79 per night. At the same time, the revenue per available room increased from RMB122.14 per night in 2022 to RMB195.90, surpassing the level seen in 2019. Finally, the average occupancy rate also recorded an upward-trending number by registering an increase from 38.35% in 2022 to 52.41% in the second quarter of this year.
With the market recovery, all hotels stand to benefit, including boutique neighborhood hotels. But before we go on, what exactly is a boutique neighborhood hotel?
What Is a Boutique Neighborhood Hotel?
Collectively, boutique neighborhood hotels are unique, intimate, small-inventory-carrying and design, history and/or culture-inspired community-focused hotels. Level positioning is often a lesser consideration for boutique neighborhood hotels as they concentrate on authenticity and the personalization of the stay experience and service. Additionally, these hotels further focus on the appeal of beautiful experiences and related factors, including but not limited to the surrounding local nature and environment, the local food, the local history, the local culture and the local art.
Community Engagement
For a boutique neighborhood hotel to remain true to its name, it is essential to form a strong relationship with the local community. The benefits of local community engagement are many, including more robust business sustainability for the hotel and community, heightened corporate social responsibility, augmented environmental sustainability and cost reduction. For example, sourcing locally reduces fuel consumption and air pollution. Ways of engaging are many as well and a few examples of how to connect are:
- Employing locally
- Utilizing local products
- Organizing local tours
- Showcasing local crafts
- Highlighting local culture
- Championing local entertainment
Shaun Brodie, Head of Research Content, Greater China, Cushman & Wakefield, said, "One important feature of a boutique neighborhood hotel is uniqueness. Often, this is achieved through style, practicality and attention to detail. The style needs to tell the story of the hotel and make it one of a kind.”
Andrew Chan, Managing Director, Head of Valuation & Advisory Services, Greater China, Cushman & Wakefield, added, “Boutique neighborhood hotels are a fairly new concept but given a greater emphasis on the overall stay experience by a cross-section of hotel guests in mainland China, this type of hotel is expected to be increasingly favored for both leisure and business stay accommodation in the future.”
Francis Li, International Director, Vice President, Greater China, Head of Capital Markets, Greater China, Cushman & Wakefield, commented, “Since the start of 2023, people’s willingness to travel for leisure in mainland China has grown stronger, while the business travel volume picked up rapidly. Both these factors have contributed to a rebound in performance in the general hotel market in mainland China. After the pandemic, people’s way of living has changed a lot, and along with this transformation, the hotel and tourism industry will also usher in new changes and opportunities.”
Please click here to download the full report.
About Cushman & Wakefield
Cushman & Wakefield (NYSE: CWK) is a leading global commercial real estate services firm for property owners and occupiers with approximately 52,000 employees in approximately 400 offices and 60 countries. In Greater China, a network of 23 offices serves local markets across the region. In 2022, the firm reported global revenue of US$10.1 billion across its core services of valuation, consulting, project & development services, capital markets, project & occupier services, industrial & logistics, retail, and others. It also receives numerous industry and business accolades for its award-winning culture and commitment to Diversity, Equity and Inclusion (DEI), Environmental, Social and Governance (ESG) and more. For additional information, visit www.cushmanwakefield.com or follow @CushWake on Twitter.
