Source: Securities Times Author: Wu Shaolong
This year, the Mid-Autumn Festival and National Day were superimposed to form an 8-day Super Golden Week. As the first Mid-Autumn Festival National Day holiday after the full liberalization of the epidemic in China, the consumption situation during Golden Week this year attracted much attention, and the hot consumer market has also become a window for observing economic resilience. During the long holidays, the Securities Times reporter thoroughly investigated various industries such as weddings, travel, catering, consumer electronics, gold and jewelry, etc., went into hotels, shopping malls, sales offices, milk tea shops, and cinemas, and sensed the temperature of consumption in the midst of rising fireworks everywhere.
“Good news: tickets have been snatched.”
“Bad news: hotel prices have gone up.”
This year's Mid-Autumn Festival and National Day holidays “coalesce”, and the 8-day “Super Golden Week” has also driven a consumption boom in China's hotel industry.
According to data published by several online travel (OTA) platforms, during the “Super Golden Week” period, it has become the norm for hotel reservations and prices in popular tourist cities to double; events such as the Asian Games, celebrity concerts, and music festivals became the main purpose of travel for travelers, and had an impact on the local hotel industry; at the same time, tight reservations and rising hotel prices triggered a chain reaction, and the “Stay at My Home on National Day” model has sprung up on many social networking platforms.
Reflected in the capital market, since this year, consumer demand for leisure travel and business travel has clearly been released, confidence in the domestic hotel market has gradually recovered, and hotel operations have recovered markedly. Wind statistics show that in Shenwan's industry classification, a total of 6 A-share companies belong to the “hotel” industry. In the first half of this year, all 6 companies achieved positive revenue growth, 4 companies achieved profit, while only 2 were profitable in the same period last year.
Hotel prices are generally rising
Manager Li of Shenzhen Futian All Seasons Hotel has been busy since late September. Because the hotel is in the core area of Shenzhen, has convenient transportation, and is rich in commerce, it has become a target for many tourists visiting Shenzhen.
Manager Li told the reporter, “The company's room occupancy rate has remained above 90% recently. This situation is likely to continue until the end of the National Day.”
Consistent with the situation described by Manager Li, this holiday is known as the “hottest National Day Golden Week in history”, and China's hotel industry is very lively.
According to the Ministry of Culture and Tourism, the number of domestic tourists visiting the country during the Mid-Autumn Festival holiday this year is expected to reach 896 million, an increase of 86% over the previous year, and domestic tourism revenue of 782.5 billion yuan, an increase of 138% over the previous year.
According to forecasts, during the eight-day holiday linked to the Mid-Autumn Festival and National Day this year, the cultural tourism market in popular tourist cities such as Shanghai, Suzhou, and Chengdu is extremely popular in the Yangtze River Delta and Pearl River Delta regions. The number of orders for hotels, air tickets, etc. has increased at least fivefold over the same period last year.
Among them, news from Hunan Province shows that on the first day of the “double festival” holiday (September 29), 954 units included in holiday statistics monitoring in the province received 1,881,800 visitors on that day, an increase of 76.89% over the previous year, and achieved revenue of 2253.14,400 yuan, an increase of 59.17% over the previous year.
The popularity of tourism has boosted the popularity of the lodging industry. The 400 accommodation units received 61,400 overnight visitors, an increase of 23.78% over the previous year, and achieved revenue of 26.3679 million yuan, an increase of 32.54% over the previous year. The daily occupancy rate of the guest rooms included in the monitoring was 76.29%.
In fact, the popularity of hotels began to spread even before the holidays. According to a report released by Ctrip, as of September 13, popular room types at resorts and influencer homestays in some popular tourist destinations were “hard to find”. Due to the hosting of the Asian Games in Hangzhou, the number of hotel reservations increased more than 8 times over the same period last year. Bookings in “new first-tier” cities such as Tianjin, Wuhan, Zhengzhou, and Suzhou are also growing at a high rate, all of which have increased more than five times over the same period last year.
Meanwhile, in Nanyang City, Henan Province, Nanyang has hosted a 3-day, 4-night Midi Music Festival since September 29. According to a report released by Ctrip, the campaign led to an 11-fold year-on-year increase in overall “Eleventh Day” order bookings in Nanyang. Among them, hotel orders reached 153 times over the same period last year.
The reporter saw on a travel platform that the price of most hotels in Beihai City had already risen to 400 yuan/night to 500 yuan/night, while the previous price was more than 100 yuan/night to more than 200 yuan/night; the price of a hotel in Guangzhou was less than 300 yuan/night before the Mid-Autumn Festival, and rose to over 700 yuan/night on the day of the Mid-Autumn Festival.
Market analysis points out that whether hotel prices will rise or not depends mainly on the relationship between supply and demand in the market. When it comes to Golden Week, domestic demand for accommodation is often at a high level, and it is inevitable that prices will rise.
New changes in the industry
Faced with the popularity of the hotel market, some netizens discovered “business opportunities” and posted “Stay at My Home on National Day” information on social platforms, driving the emergence of new forms of accommodation.
The so-called “stay at my house on National Day” means that during the National Day, due to the large number of tourists in popular tourist cities and tight hotel accommodations, citizens in these cities rent out their excess homes to tourists for a short period of time and charge a lower fee. Essentially, “stay at my house on National Day” is nothing more than a model for the sharing economy.
According to the “Stay at My Home on National Day” model design, it allows citizens to earn additional income by renting out housing, allows tourists to obtain convenience such as low-cost accommodation, etc., and ultimately pushes the city to maximize customer retention and acquisition, and boosts the development of the tourism economy. It has multiple benefits.
The reporter learned that unlike hotels and homestays, renting these private homes generally does not require a deposit or cleaning fee, does not require signing any agreement, and does not require registration of resident identity information. Most homeowners do not provide body soap, shampoo, bath towels, disposable toothbrushes, slippers, etc. as standard in the hotel. As for the reasons for renting out their rooms for a short period of time, bloggers either say “I came home on National Day, there was a kitten at home and no one to take care of”, or “I went on a trip during the National Day, there was no one at home, and I wanted someone to help water the flowers.”
The reporter searched one platform and found that a netizen in Chongqing had posted relevant information. According to its description, “150 days during the National Day, stay 5 days and get 1 day free.” “The room has 2 bedrooms, 1 living room, 2 bathrooms, so you can cook. There is an elevator, and there is a large Yonghui supermarket downstairs in the neighborhood”, etc.
Some lawyers said that “stay at my house on National Day” is essentially an online short-term rental, which is a type of sharing economy. Because its current nature is not clearly defined, it has also brought about irregularities in management. Therefore, both lessors and leasing parties should raise risk awareness and take precautions in advance.
The performance of individual hotel stocks is “picking up”
According to data released by the Ministry of Culture and Tourism, in the first half of this year, the total number of domestic tourists reached 2,384 million, an increase of 63.9% over the previous year. Domestic tourism revenue (total travel expenses) was 2.3 trillion yuan, an increase of 95.9% over the previous year, and the recovery momentum is strong.
Also, according to the “China Domestic Tourism Sentiment Report for the First Half of 2023” published by Haohua Management Consulting, in the first half of 2023, the comprehensive tourism industry sentiment index rose to a positive value of 68 for the first time since 2019, a record high.
The recovery in the hotel industry has also led to a recovery in the performance of related individual stocks.
As one of the largest listed companies in the hotel and restaurant industry in China, Jin Jiang Hotel said in its semi-annual report that from January to June 2023, 585 new hotels were opened, 204 hotels were opened and withdrawn, and there was a net increase of 381 hotels, including a decrease of 42 directly managed hotels and an increase of 423 franchise hotels.
The transportation team of Huafu Securities said that despite demand pressure in the first half of the year, the hotel industry's business resilience is still there. The impact of the summer heat loss has passed, and the demand side is gradually rising month-on-month, verifying that the hotel industry is in an upward cycle of demand recovery. In the short term, from September to October, the focus is on the Hangzhou Asian Games, Mid-Autumn Festival and National Day travel demand, and the continuous release of domestic and foreign travel demand year-on-year; in the medium to long term, it is easier for leading hotel companies to meet demand.
edit/lambor