Major international hotel groups including Marriott, Hilton, IHG, Accor, and Wyndham released their financial reports for the second quarter of 2024, collectively revealing a clear decline in the Chinese market. As a result, Marriott has even adjusted its revenue forecast for the entire year downward.
A research report by GF Securities indicates that demand in the hotel industry can be divided into two segments: leisure and business travel, with business demand accounting for approximately 60% and leisure for the remaining 40%. Consequently, mid-to-high-end hotels primarily cater to business travelers.
The manufacturing sector, a key driver of corporate travel, has been sluggish recently. Data shows that the PMI (Purchasing Managers' Index) has been in decline for three consecutive months, with both domestic and external demand remaining weak. The financial industry, known for widespread salary cuts and layoffs, has also naturally reduced business travel expenses. The construction industry, particularly real estate, has been struggling for years, a situation that requires no further elaboration.
Summer travel demand is currently supporting the market, but the real test for the Chinese hotel industry will begin in September. If business travel demand has not recovered by then, the outlook could be very grim.
