China Hotel Market Outlook-Final-EN - China Travel … PowerPoint - China Hotel Market...
Transcript of China Hotel Market Outlook-Final-EN - China Travel … PowerPoint - China Hotel Market...
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CHINA HOTEL MARKET OUTLOOK
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Topics To Cover
• Historical Supply Growth
• Developers Outlook
• Hoteliers Outlook
• Key Issues For 2009
• The Crystal Ball
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HISTORICAL SUPPLY GROWTH
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China Hotel Supply Database
• China Database has 6,008 hotels with 1.3 million rooms
• Cover all 31 provinces, 282 cities and towns
• Hotel's Opened: 4,861 hotels with 977,573 rooms
• New Supply: 1,147 hotels with 300,104 rooms
• From budget, mid-tier, up-tier to luxury hotels.
Note: 1 all the data collected YTD March 2009; 2 exclude HK, Macau, Taiwan
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Star-rating For All Existing Hotels
100.0%4,861Total Opened Hotels:
6.5%315No-rating
13.5%654Pending
34.8%1,694Budget
0.3%132-Star
3.5%1713-Star
28.1%1,3644-Star
13.4%6505-Star
RatioNo.Star-rating
Note: 1 all the data collected YTD March 20092 exclude HK, Macau, Taiwan
Pending, 13.5%
No-rating, 6.5%
5-Star, 13.4%
Budget 34.8%2-Star, 0.3%
3-Star, 3.5%
4-Star, 28.1%
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China Hotel Supply Growth
22%959,73729%4,7382008
22%789,03728%3,6692007
18%648,90223%2,8562006
14%548,93118%2,3222005
Growth%RoomsGrowth%Hotels
Hotel Supply Growth
Note: exclude HK, Macau, Taiwan
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China Existing Rooms Supply – 2000 to 2008
2000Budget, 2%
Domestic,
53%
International
, 46%
Domestic,
39%
International
, 44%
Budget, 17%
International
, 31%
Domestic,
20%Budget, 49%
2005
2008
Note: 1 exclude HK, Macau, Taiwan
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Supply Growth Excluding Budget
Note: 1 exclude HK, Macau, Taiwan; 2 exclude budget hotels; 3 source from Intl & Domestic HMCs, Horwath HTL
3%984,6552%3,8772012
5%957,1754%3,7992011
9%913,3997%3,6622010
11%837,7488%3,4282009
13%756,49812%3,1652008
14%672,19815%2,8162007
13%591,92614%2,4572006
12%524,73314%2,1562005
Growth%RoomsGrowth%HotelsYear
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China Hotel Supply Growth – Hotels
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2005 2006 2007 2008 2009 2010 2011 2012
0%
2%
4%
6%
8%
10%
12%
14%
16%
Hotels Growth%
Note: 1 exclude HK, Macau, Taiwan; 2 exclude budget hotels; 3 source from Intl & Domestic HMCs, Horwath HTL
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China Hotel Supply Growth – Rooms
Note: 1 exclude HK, Macau, Taiwan; 2 exclude budget hotels; 3 source from Intl & Domestic HMCs, Horwath HTL
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
2005 2006 2007 2008 2009 2010 2011 2012
0%
2%
4%
6%
8%
10%
12%
14%
16%
Rooms Growth%
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New Supply – Market Positioning: 2009 & 2010
Note: 1 exclude HK, Macau, Taiwan; 2 exclude budget hotels; 3 source from Intl & Domestic HMCs, Horwath HTL
4 No-rating properties include independent hotels and seeking operator hotels.
No-rating, 34% Luxury, 6%
Top-tier, 38%
Mid-tier, 22%
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Existing Hotel Supply – Beijing
51%1995902008
27%843912007
19%483072006
15%342592005
Growth %New HotelTotal
Including Budget Hotels
33%983982008
12%323002007
12%292682006
12%252392005
Growth %New HotelTotal
Excluding Budget Hotels
Note: 1 exclude HK, Macau, Taiwan
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Existing Room Supply – Beijing
38%37,360134,4352008
18%14,61397,0752007
12%8,57982,4622006
10%6,45273,8652005
Growth%
NewHotel
Total
Including Budget Hotels
30%25,080110,0632008
10%8,03784,9832007
8%5,95676,9462006
7%4,94070,9902005
Growth%
NewHotel
Total
Excluding Budget Hotels
Note: 1 exclude HK, Macau, Taiwan
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Openings in 2008 – Beijing Vs. China
Excluding Budget Hotels
22%170,70037,360Rooms
19%1,069199Hotels
RatioChinaBeijing
Including Budget Hotels
30%84,30025,080Rooms
28%34998Hotels
RatioChinaBeijing
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Intl. HMCs Deal Signing – 2007 Vs. 2008
1305346312008
142313133472007
TotalQ4Q3Q2Q1
Hotel Supply - including budget hotels
1024829252008
104192726322007
TotalQ4Q3Q2Q1
Hotel Supply - excluding budget hotels
Note: 1 exclude HK, Macau, Taiwan
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CHINA DEVELOPERS SURVEY
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China Hotel Developers Survey
What impact do you expect the current economic crisis will have on newhotel developments?
0% 5% 10% 15% 20% 25% 30% 35% 40%
Significant Dropout (>50%)
Moderate Dropout (25%)
Delay in Excess of 1 Year
Insignificant Impact
Don't Know
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China Hotel Developers Survey
How long do you think it will be before there is a significant pick-up in thehotel sector of the property market in China?
0% 10% 20% 30% 40% 50% 60% 70%
0-3 Months
3-6 Months
6-12 Months
More Than 1 Year
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China Hotel Developers Survey
How much do you think Central Government policies and the economicstimulus package will help hotel development in China?
Will Not Help13%
Will Help A Little78%
Will Help A Lot9%
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China Hotel Developers Survey
What are the major development issues (for hotels) that you face?
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Land Availability
Land Cost
Cash Flow Problems
Debt Availability
Debt Cost
Brand Availability
Infrastructure Issues
Others
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China Hotel Developers Survey
What will be your main development focus for the next 3 to 5 years?
Purely Residential5%
Purely Commercial9%
Mixed Use86%
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China Hotel Developers Survey
How do you rank the investment return potential of the followingproperty types?
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Residential Office Retail Hotel Industrial
R1 R2 R3 R4 R5
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Residential Office Retail Hotel Industrial
R1 R2 R3 R4 R5
China Hotel Developers Survey
How do you rank the investment return potential of the followingproperty types?
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0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Residential Office Retail Hotel Industrial
R1 R2 R3 R4 R5
China Hotel Developers Survey
How do you rank the investment return potential of the followingproperty types?
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China Hotel Developers Survey
Do you think there will be a lot of hotel transactions in thecoming 12 months?
Less Transactions62%
Similar Volume14%
Increase inTransactions
24%
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China Hotel Developers Survey
What are your expectations for construction costs for thenext 12 months?
0% 5% 10% 15% 20% 25% 30% 35% 40%
Decline of 30% or More
Decline Between 15% to 30%
Decline Between 0% to 15%
No Change
Increase By 0% to 15%
Increase By 15% to 30%
Increase By More Than 30%
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CHINA HOTEL MARKET SENTIMENT SURVEY
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Sentiment Survey Overview
• Participants from 46 countries
• Survey conducted in 16 languages
• About 2,800 responses
• More than 20 reports produced to date
• Follow-up survey to be conducted June/July
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Sentiment Survey Overview
• Participants from 51 cities
• More than 300 responses
• Reports produced for China, Beijing, Shanghaiand Shenzhen
• The second survey conducted in China
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Overall Sentiment Ranking
• Each answer to each question was given ascore.
• Negative answers scored negative points,positive answers positive points.
• Minimum score representing the most negativeoutlook equaled -150. Maximum scorerepresenting the most positive outlook equaled+150. A score of zero equated to a neutraloutlook.
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Asia Sentiment Rankings
Japan -72.1
South Korea -7.2
China -40.8
India -40.1
Indonesia -4.3
Hong Kong -52.7
Singapore -64.3
Thailand -44.9
Malaysia -32.8
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Asia Sentiment Rankings
Japan -72.1
South Korea -7.2
China -40.8
India -40.1
Indonesia -4.3
Hong Kong -52.7
Singapore -64.3
Thailand -44.9
Malaysia -32.8
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Asia Sentiment Rankings
Japan -72.1
South Korea -7.2
China -40.8
India -40.1
Indonesia -4.3
Hong Kong -52.7
Singapore -64.3
Thailand -44.9
Malaysia -32.8
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Asia Sentiment Rankings
Japan -72.1
South Korea -7.2
China -40.8
India -40.1
Indonesia -4.3
Hong Kong -52.7
Singapore -64.3
Thailand -44.9
Malaysia -32.8
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Market Performance Outlook - China
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Occupancy ADR Revenue
Much Better
Better
Same
Worse
Much Worse
China was slightlymore negative than theglobal average with 66
percent of therespondents stating
that market-wideoccupancy
performance would getworse than 2008. Only 9percent said it would be
better.
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Hotel Performance Outlook - China
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Occupancy ADR Revenue
-15% plus -10% to -15%
-5% to -10% 0% to -5%
0% to +5% +5% to +10%
+10% plus
About 70% or more ofhoteliers across China
expect declines inoccupancy, ADR andtotal revenue in 2009.
Only 10 percent or lessexpect growth.
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Hotel Performance Outlook - China
On average, hoteliers inChina expect declinesin market performanceof close to 5% in 2009.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Occupancy ADR Revenue
-15% plus -10% to -15%
-5% to -10% 0% to -5%
0% to +5% +5% to +10%
+10% plus
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Hotel Performance Outlook – Key Cities
Occ % ADR
Beijing 0% to -5% -5% to -10%
Shanghai 0% to -5% 0% to -5%
Shenzhen -5% to -10% 0% to -5%
Guangzhou 0% to -5% 0% to -5%
Hangzhou 0% to -5% 0% to -5%
Sanya 0% to +5% 0% to -5%
Suzhou -5% to -10% 0% to -5%
Chongqing +5% to +10% 0% to +5%
Xian 0% to -5% 0% to -5%
Dalian -5% to -10% -5% to -10%
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Factors Affecting Performance - China
Amongst the abovementioned factors,central government policy has the
most positive response as 42 percentof the hoteliers stated that
government policy would have apositive impact on performance, as
most respondents expected the RMB4 trillion economic stimulus packageto boost domestic demand. Global
economy, due to concerns withregards to the worsening financial
crisis, had the highest negativeresponse rate of 82 percent.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Stock
Market
Local
Eco
no
my
Glo
bal
Eco
no
my
Local
To
urism
New
Supply
Glo
bal
Oil
Prices
Exch
ange
Rates
Cen
tralG
overn
men
tPo
licy
Expo
rts
Very Positive Impact
Positive Impact
No Impact
Negative Impact
Very Negative Impact
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Factors Affecting Performance – Key Cities
Global Econ New Supply Exports
Beijing 1 3 4
Shanghai 1 3 2
Shenzhen 2 7 1
Guangzhou 2 8 1
Hangzhou 1 5 2
Sanya 1 5 2
Suzhou 2 1 3
Chongqing 1 8 2
Xian 1 7 2
Dalian 2 3 1
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Market Segment Performance - China
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Do
mestic
Co
rpo
rate
Foreign
Co
rpo
rate
Do
mestic
Leisure
FIT
Foreign
Leisure
FIT
Do
mestic
Leisure
Gro
up
Foreign
Leisure
Gro
up
MIC
E
Much Better
Better
Same
Worse
Much Worse
The majority of the hoteliers held ableak outlook for international
demand in 2009, as over 85 percent ofrespondents stated that performance
across foreign corporate, foreignleisure FIT and foreign leisure group
would get worse.
On the other hand, hoteliers in Chinaare much more positive on domestic
demand sources, with 20 to 30percent of respondents expecting
domestic demand to record growth.
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Market Segment Performance – Key Cities
Dom. Corp Int’l Corp Dom. Leisure Int’l Leisure
Beijing 8.4 -84.4 7.5 -81.6
Shanghai -2.0 -75.0 -3.9 -78.9
Shenzhen -40.2 -101.8 -40.2 -101.8
Guangzhou 46.9 -37.5 56.3 -37.5
Hangzhou -10.7 -75.0 0.0 -53.6
Sanya -42.9 -100.0 -10.7 -100.0
Suzhou 37.5 -87.5 37.5 -75.0
Chongqing 25.0 -50.0 0.0 -50.0
Xian 30.0 -75.0 15.0 -105.0
Dalian -75.0 -120.0 -60.0 -135.0
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KEY ISSUES FOR 2009
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Key Issues For The Hotel Industry
For the first time in a long time, the economy is viewed innegative terms for the market outlook.
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Key Issues For The Hotel Industry
• Financial services industry
• Light manufacturing
• Export-oriented industries
• Automobile Industry
For the first time in a long time, the economy is viewed innegative terms for the market outlook.
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Key Issues For The Hotel Industry
Owners Cash Flow Situation May Impact On Operationsand Owner/Management Relations
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Key Issues For The Hotel Industry
Owners Cash Flow Situation May Impact On Operationsand Owner/Management Relations
• Developers survey show that cash flow issues are listedas a major impediment to future development – it willalso be an issue for hotels that are already in operation
• Owners will be seeking/requiring stronger cash flows tohelp them get through the next 12 months
• There will be a stronger focus and attention to assetmanagement by owners to maximize cash flow
• Hotels less than 12 months old will particularly be underpressure
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Key Issues For The Hotel Industry
Booking patterns will change in response to theeconomic environment
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Key Issues For The Hotel Industry
Booking patterns will change in response to theeconomic environment
• Booking engines like eLong and Ctrip, alreadyimportant in many hotel markets in China, will becomean even more important driver of bookings
• Short-term pick up in bookings will become stronger,making it harder for budgeting and staffing
• There will be a shift down in demand to lower ratedhotels
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Key Issues For The Hotel Industry
Domestic demand sources will continue to become moreimportant
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Key Issues For The Hotel Industry
Domestic demand sources will continue to become moreimportant
• China Hotel Market Sentiment Survey shows us that theoutlook for international demand segments is notpositive – hoteliers are looking to domestic demandsources in 2009
• International hotel groups will have to makeadjustments to booking channels used and salesstrategies
• Price competition is likely to increase in the short term
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Key Issues For The Hotel Industry
While development trends may slow down, new supplywill continue to be a major issue for many markets.
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Key Issues For The Hotel Industry
While development trends may slow down, new supplywill continue to be a major issue for many markets.
• Horwath supply database shows a potential 80,000rooms to enter the market in 2009 (excluding budgethotels).
• Hotels opened in 2008 will also continue to impact themarket in 2009.
• Beijing will particularly feel the effects of new supply in2009, given an incredible amount of new supply in 2008.
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The Crystal Ball – 2009
First Half
All markets!!!!
Second Half
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THANK YOU!