China's hotel industry lags as economy soars

LONDON—Dramatic declines in China’s hotel performance during 2009—underscored by revenue per available room (RevPAR) falling 26.2 percent compared with a year ago—contrast strongly with the continuing good performance of the Chinese economy. An 8.7 percent year-on-year increase in GDP (Source: National Bureau of Statistics of China) for 2009 has experts predicting China’s economy will overtake Japan’s in 2010 and become the world's second-biggest economy after the United States. Data from STR Global, the leading provider of market information to the global hotel industry, shows the decline in RevPAR was largely due to falling average daily rate (ADR) of 21 percent with further impetus from declines in occupancy of 6.5 percent. The fall off in occupancy came amid significant increases in hotel supply during the last few years. STR Global’s Census database shows a 5-percent increase in available rooms across the country for 2009 compared to the prior year.

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