April 02, 2020
Preliminary data from lodging-data provider STR shows positive news for mainland China's hotel sector: The daily occupancy reached an absolute level of 31.8 percent on March 28. That's up from 7.4 percent during the first week of February. 

What's more, a similar trend of relatively higher hotel opening rates has been observed in key markets across the region. 

"We're seeing green shoots in hotel occupancy figures, but we must stress that these are only early signs of a recovery that is likely to develop slowly," said Christine Liu, STR's regional manager for North Asia. "Some of the demand stems from corporate travel, primarily within the same province, as well as small-scale meetings. Additionally, hotels are seeing business from those travelers quarantined after returning to China from other countries as well as those returning to cities for work. Overall, we're seeing limited leisure business in city centers but a bit more recovery in that segment in surrounding suburbs."

In Beijing, the daily occupancy was just 10 percent for the first week of March but spiked to 21.6 percent on March 28. Similarly, Shanghai saw a low of 11 percent on March 1 and a climb to 28.6 percent on March 28. The two cities with the highest absolute occupancy levels in mainland China are Xi'an, the capital of Shaanxi Province in northwest China, (35.9 percent on March 28) and Chengdu, the capital of the southwestern Chinese province of Sichuan, (35.6 percent on March 28). 

"Xi'an captured business from South Korea because of Samsung's manufacturing factory in the tech zone -- expatriates were able to relocate their families to Xi'an when the outbreak hit South Korea," Liu said. "Additionally, Xi'an is one of the redirect destinations for inbound flights scheduled to land in Beijing."  

Wuhan -- the epicenter of COVID-19 -- has seen a different trajectory when it comes to occupancy trends. After falling as low as 7.5 percent on Jan. 23, occupancy levels spiked to 72.7 percent on March 7 and leveled down to 62.4 percent on March 28.

"Wuhan saw an influx of hotel demand as medical workers entered the market, but some of that demand has tailed off as the situation becomes more stable," Liu said.

Another positive outlook for the hotel industry: After being closed for two months, 87 percent of hotels in mainland China are now open for business.