China's hotel occupancy drops

(AFP)

The performance of China's hotels has dropped by a quarter over the past year, despite the strong state of the economy, according to research released February 11.

The number of full hotel rooms fell by 6.5 percent between 2009 and 2008, said hotel analyst STR, in part because of the financial crisis. The occupancy falls in Hong Kong and Beijing were the most dramatic, at 9.4 percent and 7.7 percent respectively.

The end of the 2008 Olympics, to which China welcomed over 600,000 foreign visitors, is believed to be partially responsible for the fall in revenue per room. The games fuelled a building frenzy in Beijing, supported by the easing of restrictions on foreign ownership of hotels, boosting the number of hotels in the capital to around 5,000. Since the end of the games, revenue per available room in Beijing has fallen by 43 percent.

However, STR believes that domestic travel in China will remain strong in the coming years. Over 70 million visitors are expected at the 2010 World Expo in Shanghai this summer, providing a boost to hotels in the region.