This report analyses the performance of Greater ’s Hotel Market

Greater China

Hotel Report knightfrank.com/research May 2021 GREATER CHINA HOTEL REPORT 2021

OVERVIEW

The COVID-19 pandemic has caused devastating disruption to the travel and hospitality industry across the world, leading to unprecedented economic and social consequences. In the face of the pandemic, most countries around the world imposed partial or complete border closures, with travel restrictions affecting the majority of the world’s population.

China was the first country affected by the past 15 years, especially in February the health crisis, so its hotel industry and March, with the figure dropping to was the first to see the effect. With strict With no end in sight single digits. It was also the first time in 15 travel restrictions in various parts of to the COVID-19 pandemic years the ADR of five-star hotels dropped Chinese mainland, the hotel business below RMB900. Despite the pandemic, and the resumption of was badly shaken in the absence of seven luxury hotels opened in Shanghai inbound tourists in 2020. However, the international cross-border in 2020, adding 1,491 guest rooms to impact among cities was uneven. tourism activity, the the market. The local tourism market pandemic will continue gradually rebounded in 2H 2020, boosting Because of the pandemic, the number of the recovery of the hotel sector. international visitor arrivals to Beijing to be a drag on business plummeted by 91% YoY to 341,000 in performance in the received 2.1 million 2020. As a result, the hotel industry was hotel industry in the international overnight visitor arrivals severely affected. In 2020, the average Greater China region in 2020, plummeting by 76.7% YoY, and occupancy rate of five-star hotels in total revenue for the tourism industry Beijing dropped significantly by 41.1 in 2021 and beyond. dropped by 39.9% YoY to RMB267.9 percentage points to 29.9%. The Average billion. The ADR of five-star hotels in Daily Rate (ADR) plunged by 6.5% YoY Guangzhou dropped by 21.3% YoY to to RMB850. On the whole, the hotel RMB629.4 in 2020. The occupancy rate in industry started to pick up in 2H 2020. 2020 dropped by 14 percentage points to Six luxury hotels were opened in Beijing In Shanghai, the number of international 61.2%. Three luxury hotels were opened in 2020, adding 1,692 rooms to Beijing’s visitor arrivals decreased sharply from in Guangzhou in 2020: the Southern hotel market. The US-based Hilton 8.9 million in 2019 to 1.3 million in 2020, Airlines Pearl Hotel, the Elegant Hotel, Hotels continued its quick expansion a decline of 85.7% YoY. Business travellers and the Guangzhou Aoyuan Sheraton in China even during the pandemic. made up the lion’s share of total visitor Hotel. The domestic economy gradually The group opened two upscale hotels in arrivals because of the implementation recovered, and the pent-up desire to travel Beijing in 2H 2020: the Hilton Beijing of strict entry quarantine regulations. was released when the pandemic-related Daxing and the Hilton Beijing Tongzhou The average occupancy rate of five-star restrictions were eased. Beitou. hotels in 2020 fell to the lowest level in

Table 1. Economic indicators (2020)

Beijing Shanghai Guangzhou Shenzhen Taipei

GDP growth (YoY) 1.2% 1.7% 2.7% 3.1% -6.1% -56.3% 3.0%

GDP per capita RMB167,640 RMB159,384 RMB 133,959 RMB205,898 HK$362,310 MOP 285,314 NT$837,742 Retail sales value RMB1,371.64 RMB1,593.25 RMB 921.9 RMB 866.5 HK$326.5 MOP45.2 NT$4,639.2 (billion) Retail sales value -8.9% 0.5% -3.5% -5.2% -24.3% -41.5% -0.5% growth (YoY) Foreign direct 1.3% 6.2% 7. 5 % 11.8% -34.4% (2019) 21.2% (2019) -18.3% investment growth (YoY) Unemployemnt rate 5.2% 4.3% 2.5% 2.5% 5.5% 2.7% (Q4) 3.7%

Inflation 1.7% 1.7% 2.6% 2.3% 0.3% 0.8% 0.1%

Source: Local statistics departments / Knight Frank Research

2 GREATER CHINA HOTEL REPORT 2021

Shenzhen’s hotel industry was severely However, amid the market uncertainty, affected by the pandemic, with a several hotel projects that were originally Chart 1. International massive drop in visitor arrivals. In scheduled to open in 2020 delayed their overnight visitor arrivals, 2020, the total number of international openings, including The Lisboeta Macau 2020 overnight visitors in Shenzhen fell (820 rooms), The Grand Lisboa Palace Million people by 90.1% YoY to 1.2 million. Despite (1,900 rooms), and the 3 the poor market, some luxury hotel (3,000 rooms). brands maintained a positive long- term outlook. During the year, 13 new Taipei’s tourism industry was severely 2 luxury hotels were opened in Shenzhen, hit with unprecedented challenges in providing an additional 3,209 rooms. 2020. According to the Tourism Bureau 1 Among these five-star hotels were of Taiwan, international visitor arrivals The Renaissance Shenzhen Bay Hotel to Taipei dropped significantly to 1.4

(293 rooms), The Hilton Garden Inn million in 2020, down 88.4% YoY as a 0 Shenzhen International Convention result of border controls. The average BJ SH GZ SZ HK MO TP and Exhibition Center (407 rooms), and occupancy rate of Taipei international Source: Knight Frank Research the Andaz Shenzhen Bay (220 rooms), a tourist hotels fell to 38% from 75% in brand under the Hyatt Hotel Group. In 2019, and ADR was down 25% YoY to 2021, two five-star hotels are expected to NT$3,464. The total operating income Chart 2. Five-star hotel open in Shenzhen, the Shenzhen Conrad of Taipei international tourist hotels in stock, 2020

Hotel (298 rooms in total) and the W 2020 plummeted by 46% YoY to NT$32.2 Thousand rooms hotel, Shenzhen Jinsha Bay (350 rooms). billion. In 2020, despite the pandemic, 50 three new luxury hotels opened, adding 45 40 Hong Kong’s inbound tourism collapsed 621 rooms: the Hotel Indigo Taipei 35 in 2020 because of the pandemic. The North (149 rooms), the Mitsui Garden 30 city had only 1.4 million international Hotel Taipei Zhongxiao (297 rooms), and 25 overnight visitors, a significant plunge of the Hotel Resonance Taipei (Tapestry 20 94.3% YoY. Amid the devastating market Collection by Hilton) (175 rooms). 15 10 situation, some hotel operators in 5 Hong Kong transformed their business With no end in sight to the COVID-19 0 models and accepted long-term rentals, pandemic and the resumption of BJ SH GZ SZ HK MO TP while others considered converting international cross-border tourism Source: Knight Frank Research their properties to other uses, such activity, the pandemic will continue to as coworking or residential space, to be a drag on business performance in increase rental income. Given the poor the hotel industry in the Greater China Chart 3. Five-star hotel market conditions, many hotel operators region in 2021 and beyond. Nonetheless, room rate in 2020 put their opening plans on hold. Only we are cautiously optimistic about the two new High Tariff A hotels opened in outlook for hotel industry performance, ADR (US$) 2020 – The Hari Hong Kong (210 rooms) as domestic leisure tourism, which 250 and The Sheraton Tung Chung (218 restarted in Chinese mainland, has 200 rooms). In 2021, three more High Tariff A already provided good support for the hotels are scheduled to open – The Hotel recovery of the industry in the Mainland. 150 Alexandra (840 rooms), The Silveri, In the post-COVID-19 era, fuelled by MGallery by Sofitel (206 rooms) and the the expansion of China’s middle class 100

Regala Skycity Hotel (1,208 rooms). and the overall upgraded consumption 50 capacity of Chinese consumers, we In Macau, the number of international remain confident in the long-term 0 inbound visitors plunged 85% YoY to outlook for the Greater China hotel BJ SH GZ SZ HK MO TP Source: Knight Frank Research 5.9 million in 2020. The city received industry. only 2.8 million international overnight visitors, a sharp decrease of 84.9% YoY. In 2020, the overall five-star hotel occupancy rate was only 25.1%, and the ADR for five-star hotels was MOP1,351, a The hotel sector globally is facing unprecedented challenges, as the travel 17.8% drop YoY. Macau’s overall market restrictions and lockdown measures have resulted in a halt to international tourist sentiment was weak in 1H 2020 because arrivals. Nonetheless, on the back of the huge pent-up travel demand in the of the pandemic. But with the gradual post-COVID era, coupled with the strong potential demand for both leisure and relaxing of travel restrictions and business travel generated by the Greater Bay Area initiative, the longer-term removal of the mandatory quarantine prospects for tourism in the Greater China region remain positive. requirement for Chinese tourists in 2H, Macau recorded a quarterly surge of Martin Wong 150.3% in visitor arrivals in Q4 2020. Director, Head of Research & Consultancy, Greater China

3 GREATER CHINA HOTEL REPORT 2021

BEIJING

No. of 5-star hotel rooms New supply of 5-star hotel Average daily rate Hotel o ccupancy by 2020 (room) rooms in 2020 (room) (ADR) in 2020 rate in 2020 44,163 1,692 RMB 850 29.9% (-6.5% YOY) (-41.1ppt)

OVERVIEW As a result of travel restrictions revenue was only US$480 million, a pandemic, during the Spring Festival in around the world due to the COVID-19 decrease of 90.8% YoY. There were 2020, nearly 10,000 cultural activities pandemic, the number of visitor arrivals 183.5 million domestic tourists in 2020, were cancelled, and 9,000 cultural and to Beijing dropped massively in 2020. a decrease of 42.3% YoY, and total entertainment venues and 181 tourist The total number of inbound tourists domestic tourism revenue was RMB288.1 attractions were closed to reduce the risk plummeted by 91% year-on-year (YoY) billion, down 50.9% YoY. Due to the of spreading COVID-19. to 341,000; and international tourism

SUPPLY AND DEMAND

In 2020, six luxury hotels opened in from the domestic arrivals hall on level reduced. By the end of the fourth Beijing, adding 1,692 rooms to Beijing’s two of the terminal. quarter of 2020 (Q4 2020), the average hotel market. All six new hotels are occupancy rate of five-star hotels in situated in non-core areas and opened The Hilton Beijing Tongzhou Beitou, Beijing decreased significantly by 41.1 in 2H 2020. At the end of December which opened on 30 September 2020, percentage points to 29.9%. The Average 2020, there were 44,163 luxury hotel is the first five-star hotel in Tongzhou Daily Rate (ADR) plunged by 6.5% YoY rooms in Beijing. District. The hotel features a unique to RMB850. However, on the whole, with location, convenient transport, and rich effective control of the epidemic, the With the completion of Beijing Daxing tourism resources in the surrounding tourism market started to pick up in 2H Airport, the ancillary facilities in the area. With the opening of Universal 2020. During the May Day Golden Week surrounding area have been gradually Studio in 2021, Tongzhou District is holiday, Beijing received 4.6 million improved. In 2020, two luxury hotels expected to soon usher in a new era of tourists, bouncing back to 55% of that opened in Daxing District. On 17 tourism, providing huge opportunities in the same period in 2019; and total August, the Hilton Beijing Daxing was for the hotel market. On 10 October tourism revenue was RMB4.18 billion, officially opened, filling the gap in the 2020, the Narada Hotel opened. Located returning to 36% of that in the same full-service international hotel market in Haidian District, the hotel is adjacent period in 2019. During the National in Daxing District, promoting the to natural and humanistic tourist Day and Mid-Autumn Festival holidays construction of ancillary facilities and attractions, including Yangtai Mountain in 2020, residents’ desire to travel was the business environment of Beijing and Phoenix Mountain, and Space strong. From 1 to 8 October, one million Daxing International Airport. On 14 Discovery Park. tourists visited the city, returning to November, the Mumian, at Beijing 71.6% of the figure in the same period in Daxing International Airport, opened. As the hospitality and tourism industry 2019, and accumulated tourism revenue Located in the finger corridor in the was hit hard in 2020, demand for hotel was RMB129 million, reaching 61.7% of north, the hotel is only 300 metres away accommodation was significantly that in the same period in 2019.

4 GREATER CHINA HOTEL REPORT 2021

O U T L O O K CHART 4. Beijing's international overnight visitor arrivals In 2021, seven five-star-rated hotels International overnight visitors YoY growth with a total of 2,566 guest rooms are Million YoY growth expected to open in Beijing, including people (%) the Universal Studio Grand Hotel (800 8 80 rooms), the Nuo Resort Hotel (400 6 60 rooms), the Shangri-La Beijing Shougang 4 40 (282 rooms), the Beijing Hilton Garden 2 20 Inn (230 rooms, estimated by Knight Frank), the Hualuxe Beijing (380 rooms), 0 0 -2 -20 2011 the Prime Hotel Beijing (399 rooms), and 2017 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 2008 2004 the Beijing Qianmen Oriental Mandarin -4 -40 Hotel (75 rooms). It is estimated that -6 -60 Beijing will have 46,729 luxury hotel rooms in 2021. -8 -80 -10 -100

In the short term, although the spread Source: Beijing Tourism Bureau / Knight Frank Research of COVID-19 was gradually contained in China, the pandemic situation across the world is very negative. Therefore, domestic tourism is expected to remain the main driving force behind Beijing’s CHART 5. Beijing’s five-star hotel stock hospitality and hotel industry in the No. of hotel rooms next year, as international tourism still Thousand rooms faces tremendous uncertainty. 50 45 According to the Key Working Points 40 2021, issued by the Beijing Municipal 35 Bureau of Culture and Tourism, 30 Beijing’s hotel industry will enjoy vast 25 opportunities in the mid to long term. 20 First, the government will actively 15 support “red tourism”. Beijing will 10 focus on the 100th anniversary of the 5 founding of the Communist Party of 0 1 7 7 5 9 6 4 8 3 2 5 9 6 4 8 0 1 1 1 1 1 1 1 1 1 China (CPC), taking advantage of the 1 0 20 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 rich red tourism resources in Beijing, 2 developing red tourism products and Source: Beijing Tourism Bureau / Knight Frank Research red tourism routes. This is expected to attract a large number of domestic tourists. Second, Beijing will develop Winter Olympics cultural tourism. For example, a series of Winter Olympics CHART 6. Beijing's five-star hotel performance city cultural activities will be held, ice Hotel occupancy rate and snow cultural tourism routes will be Average Daily Rate developed, and a Beijing-Zhangjiakou ADR Occupancy (RMB) rate (%) sports cultural tourism belt will be constructed. Benefitting from the 1,400 100% 90% 2022 Winter Olympic Games, all these 1,200 activities will attract more tourists from 80% 1,000 70% all over the world. In addition, Phase 60% I of Beijing Universal Studio is almost 800 50% 600 completed and will start trial operations 40% in May 2021. The opening of Beijing 400 30% Universal Studio will inject new vitality 20% 200 into Tongzhou District and Beijing and 10% drive the development of hotel industry 0 0% to a new stage. 2017 2011 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 2008 2004

Source: Beijing Tourism Bureau / Knight Frank Research

5 GREATER CHINA HOTEL REPORT 2021

SHANGHAI

No. of 5-star hotel rooms New supply of 5-star hotel Average daily rate Hotel occupancy by 2020 (room) rooms in 2020 (room) (ADR) in 2020 rate in 2020 40,316 RMB 785 37.8% 1,491 (-18.1% YoY) (-30.6 ppt)

OVERVIEW As a result of the COVID-19 pandemic, The unexpected outbreak caused a However, thanks to quick and efficient the number of international business tremendous disruption to the tourism virus prevention and control measures, travellers and tourists in Shanghai and hotel industries. According to the pandemic’s influence on Shanghai’s decreased sharply to 1.3 million in government statistics, the occupancy economy gradually tapered off. In the 2020, a drop of 85.7% YoY. The number rate for five-star rated hotels in 2020 fell second half of 2020, domestic trips in of overseas visitors dropped 88% YoY to the lowest level in the past 15 years, China during the holidays increased to 830,010, and the number of visitors especially in February and March, when significantly. As an important tourist from Hong Kong, Macao and Taiwan the occupancy rate dropped to single city, Shanghai’s hotel sector showed dropped 77.8% YoY to 456,100. In 2020, digits. It was the first time in 15 years obvious signs of recovery. business travellers made up the lion’s the Average Daily Rate (ADR) of five-star share of total overseas visitors because rated hotels dropped below RMB900. of the implementation of strict entry quarantine regulations.

SUPPLY AND DEMAND In 2020, seven luxury hotels were Resort, the 234-room hotel was the only Owing to the pandemic, opened in Shanghai, adding 1,491 guest luxury hotel that opened in the first half accommodation demand dropped to rooms to the market. At the end of 2020, of 2020 in Shanghai. With the effective the freezing point, and the occupancy the number of luxury guest rooms in prevention and control of COVID-19 in rate and gross revenue fell off a cliff Shanghai totalled 40,316, up 4% YoY. the second half of 2020, the hotel sector in the first half of 2020. The overall Because of the pandemic, many hotel witnessed some new openings of occupancy rate of five-star rated hotels investors delayed new hotel openings. luxury hotels in Shanghai. The Grand in 2020 dropped significantly by 30.6 Therefore, fewer hotels were opened in Mercure Hotel Lingang Shanghai, percentage points to 37.8%, and the 2020 than in any year since 2016. The located in the Lingang Special Area, ADR of five-star rated hotels in new luxury hotels were located mainly was opened in September 2020. Shanghai decreased 18.1% YoY to in areas with strong accommodation Managed by Accor Group, this luxury RMB785. demand from tourists and business hotel added 212 rooms to the market. travellers, such as Shanghai In November 2020, the Crowne Plaza The local tourism market gradually International Resort, the Lingang Shanghai Hongqiao, managed and rebounded in the second half of Special Area and the Hongqiao CBD. operated by InterContinental Hotels 2020, boosting the recovery of the Group, opened. The hotel has 330 hotel sector. Shanghai Disney Resort In January 2020, Narada Hotel, of rooms and is located in the core area reopened on 11 May, making it the first Narada Hotel Group, opened. Located in of the Hongqiao CBD, adjacent to the reopened Disney Resort in the world the core area of Shanghai International Hongqiao transportation hub. in 2020. It is estimated that Shanghai

6 GREATER CHINA HOTEL REPORT 2021

International Resort received 14 million visitors in 2020, bouncing back to 80% CHART 7. Shanghai's international overnight visitor arrivals of that in 2019. During the National Day International overnight visitors YoY growth and Mid-Autumn Festival holidays, Shanghai received 8.8 million tourists Million YoY growth people (%) and generated tourist revenue of 8 80 RMB13.5 billion, picking up to 75% and 6 60 80% of the 2019 figures, respectively. From 1 to 7 October, the occupancy rate 4 40 of hotels in Shanghai reached 66%, 16 2 2 percentage points higher than that in 0 0 the same period in 2019. In December, -20 2011

-2 2017 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 2008 the occupancy rate in Shanghai’s five- 2004 star rated hotels rose to 47%, an increase -4 -40 of 15.5 percentage points, from 31.5% -6 -60 in June. -8 -80

-10 -100 O U T L O O K Source: Shanghai Municipal Tourism Administration / Knight Frank Research Shanghai’s measures to contain the spread of COVID-19 gave confidence to domestic and international investors and hotel operators in China’s hotel and CHART 8. Shanghai's five-star hotel stock tourism market, and many international No. of hotel rooms hotel groups chose to expand against the trend in the Shanghai market. Thousand rooms Twelve hotels with over 3,000 rooms are 45 scheduled to open in 2021. New hotels 40 that have confirmed that they will 35 open include the JW Marriott Shanghai 30 Fengxian in the Oriental Beauty Valley 25 (265 rooms), the Westbund Hotel 20 Shanghai (219 rooms) in Xuhui Binjiang, 15 the J Hotel (258 rooms) in Shanghai 10 Tower, and the Shangri-la Hotel in 5 Qiantan (604 rooms) in Pudong. In the 0 1 0 7 7 3 3 2 2 5 5 9 9 6 6 4 4 8 8 0 1

next few years, several theme parks are 1 1 1 1 1 1 1 1 1 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 scheduled to open, including Wintastar 2 in Lingang (2022), Lego Land in Source: Shanghai Municipal Tourism Administration / Knight Frank Research Jinshan (2024), Discovery Theme Park in Baoshan, and the Shanghai Disney Resort Expansion Project.

The impact of the COVID-19 pandemic CHART 9. Shanghai's five-star hotel performance on Shanghai’s economy has tended to be limited, given the effective control Average Daily Rate Hotel occupancy rate measures. Driven by demand from ADR Occupancy domestic tourists, the tourism sector’s (RMB) rate (%) recovery exceeded market expectations. 1,200 100 We expect that both the tourism and 1,100 hotel markets will recover in a stable 80 manner. Looking ahead, the occupancy 1,000 60 rate of Shanghai’s hotel market in 900 2021 is expected to increase by 5 to 8 40 percentage points YoY, while the ADR 800 is expected to remain stable or increase 20 700 slightly. Demand will be mainly from business travellers and local tourists. 600 0

2017 2011 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 2008 2004

Source: Shanghai Municipal Tourism Administration / Knight Frank Research

7 GREATER CHINA HOTEL REPORT 2021

GUANGZHOU

No. of 5-star hotel rooms New supply of 5-star hotel Average daily rate Hotel occupancy by 2020 (room) rooms in 2020 (room) (ADR) in 2020 rate in 2020 1,362 RMB629 61.2% 19,667 (-21.3% YoY) (-14ppt)

OVERVIEW Guangzhou’s economy remained stable However, Guangzhou’s role as one of the Impacted by the COVID-19, some amidst the COVID-19 outbreak and most important transportation hubs developers with high-end hotel the volatile external environment. in the Greater China region was not projects on the outskirts of Guangzhou Guangzhou’s Regional GDP grew by undermined by the pandemic. Annual were eager to sell off their projects to 2.7% YoY, reaching RMB2,501.9 billion passenger throughput in Guangzhou maintain sufficient cash flow. However, in 2020, ranking second among the four Baiyun International Airport ranked several high-end hotel brands were still first-tier cities. first in the world in 2020, reaching 43.8 looking for expansion in Guangzhou, million, exceeding that of Hartsfield- with Zhujiang New Town the preferred The tourism industry in Guangzhou Jackson Atlanta International choice. Developers also prioritised newly was badly affected by the pandemic. Airport. The third phrase of the developed districts such as Pazhou and According to the Guangzhou Bureau expansion plan of Guangzhou Baiyun Scientific City, Luogang for their projects. of Statistics, in 2020, the number International Airport has remained on Also, some landlords of office buildings of international overnight visitors schedule to meet the growing need for in the emerging CBDs chose to cooperate plummeted by 76.7% YoY to 2.1 million, transportation in the Greater Bay Area. with high-end hotel brands to diversify and total revenue from tourism industry the usage of space in their properties. dropped by 39.9% YoY to RMB267.9 billion.

Given Guangzhou’s strategic position as a national central city and a comprehensive gateway city SUPPLY AND DEMAND promoted by the Central government, In 2020, three luxury hotels opened in we expect good prospects for the development The Elegant Hotel, which opened in Hotel Group. It offers 274 rooms and is Guangzhou, adding 1,362 rooms to the of the luxury hotel market in Guangzhou. June 2020, is located in Tiande Plaza, the first international hotel brand to local hotel market. By the end of 2020, a new business and entertainment operate in Panyu. there were a total of 19,667 high-end landmark in Guangzhou. The hotel hotel rooms in Guangzhou, an increase offers 387 rooms and suites. It is the first Owing to COVID-19 pandemic, the of 7.4% YoY. signature, high-end hotel project from Average Daily Rate (ADR) of five-star the Mehood Hotel Group in Guangzhou. hotels in Guangzhou dropped by 21.3% The Southern Airlines Pearl Hotel, YoY to RMB629.4 in 2020. The average which opened in January 2020, offers The Sheraton Guangzhou Panyu Hotel, occupancy rate in 2020 dropped by 14 701 rooms and suites. It is located in which opened in August 2020, is located percentage points to 61.2%. Once the the core area of the Guangzhou Airport next to the Aoyuan International COVID-19 situation improved in mid- Economic Zone, near Guangzhou Center, which is in the heart of the 2020, the local hotel industry started to Baiyun International Airport and the Wanbo CBD of Panyu district. The China recover, along with five-star hotels in Guangzhou Aerotropolis Development Aoyuan Group invested in the hotel, and Guangzhou, with the growing number District. it is operated by Marriott International of domestic travellers.

8 GREATER CHINA HOTEL REPORT 2021

O U T L O O K CHART 10. Guangzhou's international overnight visitor arrivals Two more new luxury hotels are International overnight visitors YoY growth scheduled to open in 2021, the Million YoY growth Kempinski Hotel (261 rooms) in Yuexiu people (%) district, one of the oldest CBDs in 10 100 Guangzhou, and the Narada Hotel (316 8 80 rooms) in Huangpu, which is known as 6 60 the second CBD of Guangzhou. With 4 40 these two new hotels, 557 extra luxury 2 20 hotel rooms will be added to the hotel 0 0 market, bringing the total number of -2 -20 2017 2011 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 available luxury hotel rooms to 20,244. 2008 -4 -40

-6 -60 The Evergrande Cultural Tourism City in Nansha was one of the key -8 -80 development projects in -10 -100

Province in 2020. With an investment Source: Guangzhou Tourism Bureau / Knight Frank Research value of RMB20 billion, the project covered a construction area of 967 acres (3.9 million sqm), including a 783-acre (3.1 million sqm) amusement park. Upon its completion, it will be the first CHART 11. Guangzhou's five-star hotel stock amusement park project in Nansha. No. of hotel rooms It is expected to drive the number of overnight visitors and demand for hotel Thousand rooms rooms for the local market in the long 25 run. 20 The 14th “Five-year Plan” of Guangdong province was announced 15 in December 2021. Highlighted in the plan were emerging businesses 10 districts in Guangzhou, like Nansha, Pazhou, and the Sino- 5 Guangzhou Knowledge City project. 0 1 7 7 3 2 5 5 9 9 6 6 4 8 The establishment and development of 8 0 0 1 1 1 1 1 1 1 1 1 1 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 new districts are expected to increase 2 2 2 2 2 2 2 2 demand for hotel rooms from business visitors. Source: Knight Frank Research

Despite the short- and medium-term impact of the pandemic, Guangzhou’s hotel industry will be supported by various positive factors, including CHART 12. Guangzhou's five-star hotel performance policies emphasising domestic Average Daily Rate Hotel occupancy rate consumption as a national strategic ADR Occupancy plan, and the further containment of (RMB) rate (%) the coronavirus with the successful 900 90 launch of vaccines. As the domestic 80 800 economy has gradually recovered, and 70 700 pent-up demand for travel has been 60 unleashed with the easing of COVID- 600 50 related restrictions, the overall market 500 40 for high-end hotels in Guangzhou is 30 400 expected to improve in 2021. 20 300 10 200 0 2017 2011 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 2008

Source: Knight Frank Research

9 GREATER CHINA HOTEL REPORT 2021

SHENZHEN

No. of 5-star hotel rooms New supply of 5-star hotel Average daily rate Hotel occupancy by 2020 (room) rooms in 2020 (room) (ADR) in 2020 rate in 2020 22,588 3,209 RMB528 61% (-29.9% YoY) (-13.3 ppt)

OVERVIEW Despite the COVID-19 pandemic and of passengers using Shenzhen Baoan expand their portfolios. As Nanshan external uncertainties, Shenzhen International Airport dropped by 28.4% District in Shenzhen is promoted as demonstrated its resilience to the YoY to 37.9 million, but its passenger a cluster for various industries and mounting pressure with positive results. throughput for the entire year remained headquarters under the government’s Its gross domestic product (GDP) grew third-highest in China, after Shanghai supporting policy, the district has by 3.1% YoY, reaching RMB2.77 trillion Pudong International Airport and become an important location for in 2020, ranking first among top-tier Guangzhou Baiyun International many high-end hotel brands when they Chinese metropolises in terms of GDP Airport. consider setting up new hotel projects. growth rate. Notwithstanding the poor market While the entire luxury hotel industry Shenzhen’s tourism industry suffered conditions, some luxury hotel brands was hit hard by the pandemic, some hotel significantly during the pandemic. In maintained a positive long-term market operators reported that in mid-2020, 2020, the total number of international outlook. Some operators with existing with the release of pent-up demand from overnight tourists in the city dropped hotel properties in the city were still domestic tourism, the high-end hotel by 90.1% YoY to 1.2 million. The number seeking potential new proprieties to market in Shenzhen gradually recovered.

SUPPLY AND DEMAND During 2020, 13 new luxury hotels The Renaissance Shenzhen Bay Hotel, The Andaz Shenzhen Bay Hotel, under opened in Shenzhen, providing an which opened in October 2020, is the Hyatt Hotel Group, was opened in additional 3,209 rooms: the Andaz located in the centre of Nanshan December 2020. This 220-room hotel Shenzhen Bay Hotel, the Crowne Plaza Science and Technology Park. It has 293 is the third Andaz Hotel in the Chinese Shenzhen WECC, the Renaissance rooms and suites and is the 16th hotel mainland. The project is located in Shenzhen Bay Hotel, the Crowne Plaza of the Marriott International Group in the centre of the Shenzhen Houhai Shenzhen Nanshan, the Hilton Garden Shenzhen. Financial Headquarters Base, right Inn Shenzhen WECC, the Genpla Hotel next to landmarks such as the China Shenzhen NanShan, the Hamps Hotel, The Hilton Garden Inn Shenzhen Resource Tower and the MixC shopping the ICON LAB Hotel Shenzhen Futian, International Convention and mall. the Atour S Hotel Nanshan Shenzhen, Exhibition Center, adjacent to the the Grand Mercure Nanshan Shenzhen, Shenzhen International Exhibition Owing to the impact of the Covid-19 the Kyushu Joycheng Hotel, the Haituo and Convention Center, was opened in pandemic, the Average Daily Rate (ADR) Shenzhenair Sky Park, and the ICON December 2020, with 407 rooms and of five-star hotels in Shenzhen dropped LAN Hotel Shenzhen Sea World. At the suites. It is the second Hilton Garden by 29.9% YoY to RMB528 in 2020, and end of 2020, the total number of luxury Inn hotel in Shenzhen and has the the occupancy rate of Shenzhen’s five- hotel rooms increased by 16.5% YoY to highest number of rooms of all Garden star hotels dropped drastically by 13 22,588. Inn hotels. percentage points YoY to 61%.

10 GREATER CHINA HOTEL REPORT 2021

O U T L O O K CHART 13. Shenzhen's international overnight visitor arrivals In 2021, two five-star hotels are expected International overnight visitors YoY growth to open in Shenzhen, the Shenzhen Million YoY growth Conrad Hotel (298 rooms), located in people (%) the CBD of Shezhen Qianhai, and the W 40 40 hotel, Shenzhen Jinsha Bay (350 rooms), 20 20 in Kaisa International Resort. With the opening of those two hotels, offering 0 0 approximately 648 more high-end hotel 2017 2011 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 rooms, there will be about 23,236 high- -20 2008 -20 end hotel rooms in the market. -40 -40

Kaisa’s Jinsha Bay International Resort, -60 -60 the largest coastal resort in Shenzhen, -80 -80 is expected to be partially opened in 2021. The project will cover about 1.5 -100 -100 million sqm, including five different Source: Shenzhen Tourism Bureau / Knight Frank Research theme parks, with themes such as Ice and Snow, Aquarium and the Future. There will also be ecological parks, costal sidewalks, and various other attractions. Upon completion, the resort CHART 14. Shenzhen's five-star hotel stock park is expected to attract both local No. of hotel rooms and international tourists to Shenzhen. Thousand rooms

In October 2020, the General Office 25 of the Central Committee of the Communist Party of China issued 20 and released the “Implementation Plan for the Comprehensive Reform 15 Pilot Program of Building a Pilot Demonstration Zone of Socialism with 10 Chinese Characteristics in Shenzhen 5 (2020-2025)”. The plan reinforces Shenzhen’s role as a pilot for business at 0 1 7 7 3 2 5 5 9 9 6 6 4 8 8 0 0

the national strategic level. Therefore, it 1 1 1 1 1 1 1 1 1 1 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2 may further promote the development 2 2 2 2 2 2 of high-end, high-tech industries in Source: Knight Frank Research Shenzhen, such as finance, commerce and technology, and attract more business visitors to Shenzhen.

In 2021, as the COVID-19 pandemic CHART 15. Shenzhen's five-star hotel performance is gradually getting under control in China, along with government policy Average Daily Rate Hotel occupancy rate support and the opening of the large- ADR Occupancy (RMB) rate (%) scale tourism attractions, the tourism market in Shenzhen is expected to 800 90 continue to recover, with demand from 80 700 business travellers and medium and 70 long-distance travellers. These positive 600 60 50 indicators are promising factors that 500 will continue to promote a significant 40 recovery for the high-end hotel industry 400 30 20 in Shenzhen. 300 10 200 0 2017 2011 2012 2013 2015 2019 2016 2014 2018 2010 2020

Source: Knight Frank Research

11 GREATER CHINA HOTEL REPORT 2021

HONG KONG

No. of 5-star hotel rooms New supply of 5-star hotel Average daily rate Hotel occupancy by 2020 (room) rooms in 2020 (room) (ADR) in 2020 rate in 2020 19,766 428 HK$1,617 24% (-18.4% YoY) (-50 ppt)

OVERVIEW Hong Kong’s inbound tourism collapsed many hotel operators offered staycation Prince Hotel in 2021 after a full 15-month after the COVID-19 outbreak. With the packages with cut-throat discounts renovation. A third example is the Four rigorous border restrictions since March to provide local residents with a local Seasons Hotel, which commenced a 2020, which prohibited the entry of non- vacation alternative. major enhancement plan in October Hong Kong residents, tourists basically 2020, including the redesign of all disappeared. As a result, Hong Kong Some hotels adjusted their business hotel guestrooms by phases and the received only 1.4 million international models to accept long-term guests refurbishment of the hotel lobby. The overnight visitors in 2020, compared or offer long-stay packages. They hotel aims to unveil the new experience to 23.8 million in 2019, a drop of 94.3% offered monthly-rental packages at a for its hotel guests in Spring 2021. year-on-year (YoY), according to the competitive rate compared to the private Hong Kong Tourism Board. Visitors residential leasing market. Although A number of hotel properties had to find from the Chinese mainland, which the rates are much lower than the daily alternative sources of income, including constituted 65% of the total visitor rates, they help fill rooms and generate converting their property to other uses. arrivals, also dropped significantly by stable income. Some examples include Kerry Hotel’s 94.5% YoY to 884,985. collaboration with theDesk, leasing While some operators temporarily 6,600 sq ft to the co-working company. Amid the devastating market situation, suspended their businesses to Tang’s Living Group leased its rooms hotel operators in Hong Kong struggled reduce losses, others grabbed the as working area during day, providing to remain afloat. In the absence of opportunity to renovate or rebrand office facilities, meeting rooms, and inbound tourism, many hotel operators their hotels, which will allow them complimentary lunch and afternoon tea. had to readjust their business models to raise their Average Daily Rate Some hotel operators converted their and switch their focus to local residents. (ADR) in the long run. One example is properties into residential buildings, Some hotels took the opportunity to the InterContinental Hotel, in Tsim as there is no recovery in sight for the accommodate people who were required Sha Tsui, which stopped its hotel tourism industry. Some recent cases to quarantine. After a government operations in April 2020 for a large-scale include the Horizon Suite Hotel, in assessment, 30 hotels were shortlisted renovation. It will be rebranded as the Ma On Shan, and the Novotel Nathan to provide about 8,300 rooms for people Regent Hong Kong when it reopens in Road, Kowloon. Their applications arriving in Hong Kong from places 2022. Another example is the Prince for conversion to residential use were outside China for quarantine purposes. Hotel, which closed in February 2020 approved by the Town Planning Board in As a strategy to boost occupancy, and plans to reopen as the Marco Polo March 2021.

SUPPLY AND DEMAND Given the poor market outlook, many hotels with 210 rooms, and The Sheraton Tung As overnight visitor arrivals plunged, with plans to open in 2020 have seen delays. Chung (218 rooms). As at the end of 2020, in 2020, the occupancy rate of hotels Only two new High Tariff A hotels opened the total stock of High Tariff A hotel plummeted 50 percentage points YoY in 2020, The Hari Hong Kong in Wan Chai, rooms reached 19,766. to 24% for High Tariff A hotels and 34

12 GREATER CHINA HOTEL REPORT 2021

percentage points to 45% for High Tariff B hotels. The occupancy rate of Medium CHART 16. Hong Kong's international overnight visitor arrivals Tariff hotels dropped 20 percentage points to 62%. International overnight visitors YoY growth Million YoY growth people (%) The ADR of High Tariff A hotels plunged 18.4% YoY to HK$1,617. In other 30 30 hotel categories, the drop in ADR was 20 20 10 10 more significant. The ADR of High 0 0 Tariff B and Medium Tariff hotels fell -10 -10 2017 2011 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 38.7% and 32.3% YoY, respectively, to -20 2008 -20 HK$608 and HK$436. -30 -30 -40 -40 -50 -50 -60 -60 -70 -70 O U T L O O K -80 -80 -90 -90 In 2021, three High Tariff A hotels are -100 -100 scheduled to open, providing about Source: Hong Kong Tourism Board / Knight Frank Research 2,300 rooms: Hotel Alexandra (840 rooms) in North Point, The Silveri, MGallery, by Sofitel (206 rooms) in Tung Chung, and the Regala Skycity Hotel (1,208 rooms) in SKYCITY, Chek Lap CHART 17. Hong Kong's high tariff A hotel stock Kok. The total stock of High Tariff A No. of hotel rooms hotel rooms will reach about 21,500 by the end of the year. Thousand rooms 25 Given the lingering impact of the pandemic, the hotel market is still 20 facing mounting challenges. Until the border reopens, hotel operators will 15 continue to rely on local demand, given the lack of tourists. The occupancy 10 level and ADR of High Tariff A hotels 50 are expected to remain at low levels in 2021, given limited domestic demand. 0 1 7 7 3 2 5 5 9 9 6 6 4 8 8 0 However, in the longer-term, the 0 1 1 1 1 1 1 1 1 1 1 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 2

pent-up demand for travel from both 2 2 2 2 2 2 international and business travellers Source: Hong Kong Tourism Board / Knight Frank Research is expected to support a U-shaped recovery and the revival of the hotel industry in Hong Kong.

CHART 18. Hong Kong's high tariff A hotel performance Average Daily Rate Hotel occupancy rate

ADR Occupancy (HK$) rate (%)

3,000 100 90 2,500 80 70 2,000 60 50 1,500 40 30 1,000 20 10 500 0 2017 2011 2013 2012 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 2008

Source: Hong Kong Tourism Board / Knight Frank Research

13 GREATER CHINA HOTEL REPORT 2021

MACAU

No. of 5-star hotel rooms New supply of 5-star hotel Average daily rate Hotel occupancy by 2020 (room) rooms in 2020 (room) (ADR) in 2020 rate in 2020 21,700 0 MOP1,351 25.1% (-17.8% YoY) (-67.2 ppt)

OVERVIEW The coronavirus pandemic impacted arrivals, the average length of stay of Macau’s overall market sentiment was the tourism industry across the world, visitors increased slightly by 0.2 days to weak in 1H 2020 due to the COVID-19 and Macau was no exception. According 1.4 days. outbreak. However, with the gradual to the Statistics and Census Service of relaxing of travel restrictions and the Macau SAR government, the number of Macau’s hotel sector suffered severely removal of the mandatory quarantine inbound visitors plunged 85% year on from the collapse of inbound tourist requirement for Chinese mainland year (YoY) to 5.9 million in 2020. Visitors arrivals. In 2020, the overall five-star tourists in 2H, Macau recorded a from Chinese mainland accounted for hotel occupancy rate was only 25.1%, quarterly surge of 150.3% in visitor 80.6% of overall visitor arrivals. In 2020, while the Average Daily Rate (ADR) for arrivals in the fourth quarter of 2020 Macau had 2.8 million international five-star hotels was MOP1,351, a drop of (Q4 2020), and the average length of stay overnight visitors, a sharp decrease of 17.8% YoY. Amid the pandemic, Macau’s of visitors went up by 0.3 day YoY to 1.5 84.9% YoY. The number of package tour casinos had to shut down for two weeks days. visitors dropped 96.8% YoY to 262,500. in February 2020, resulting in a sharp Despite the drastic fall in visitor decline in gambling revenue.

SUPPLY AND DEMAND

As at the end of December 2020, 120 Amid the global pandemic and Versace and the Karl hotels were in operation, about 61.8% economic uncertainty, several hotel Lagerfeld. The opening dates have yet to of which were five-star hotels. There projects that were originally scheduled be confirmed. were a total of 35,100 guest rooms in the to open in 2020 delayed their openings, market, down 8.2% YoY. including The Lisboeta Macau (820 The launch date of Phase 3 and 4 of the rooms), The Grand Lisboa Palace (1,900 Galaxy Macau is also expected to be Over the same period, there were 17 rooms), and the Galaxy Macau (3,000 delayed. For Phase 3, which comprises new hotel projects under construction, rooms). The Lisboeta Macau comprises The Andaz Macau Hotel (700 rooms), which will add an additional 8,607 three hotel brands, the Lisboeta Hotel, Raffles Hotel (450 suites), a 16,000-seat guestrooms to the local market, the Maison L’occitane Hotel, and the arena and approximately 40,000 sqm of according to statistics from the Land, LINE Friends Casa d’Amigo. Another MICE space and casino area, the launch Public Works and Transport Bureau. large-scale hotel project – The Grand date will be push back from 1H to 2H Twenty hotel projects were in the design Lisboa Palace – also comprises three 2021. stage, involving 2,268 rooms. hotel brands: the Grand Lisboa Palace,

14 GREATER CHINA HOTEL REPORT 2021

O U T L O O K CHART 19. Macau's international overnight visitor arrivals In 1Q 2021, Ltd unveiled a International overnight visitors YoY growth large-scale luxury hotel, the Londoner Million YoY growth Macao (600 suites), on the Strip, people (%) in February 2021. Representing an 40 40 investment of US$1.9 billion (MOP 20 20 15.2 billion), The Londoner Macao will continue to introduce additional 0 0 integrated resort offerings by phrases 2017 2011 2012 2013 2015 2019 2016 2014 2018 2010

2007 -20 2020 2005 2009 2006 2008 throughout 2021, including the Suites -20 2004 by David Beckham, Londoner Court, a -40 -40 luxury residential-style all-suite hotel, the re-themed Shoppes at Londoner, -60 -60 and the Londoner Arena. -80 -80

Dampened by a sharp plunge in overall -100 -100 visitor arrivals, Macau’s tourism, Source: Macau DSEC / Knight Frank Research gambling and hospitality industries were all under heavy pressure in 2020. On the positive side, the city’s coronavirus situation was quickly brought under control, leading to a fast CHART 20. Macau's five-star hotel stock recovery in visitor arrivals in Q4 2020, No. of hotel rooms when Macau announced that tourist visas would be reinstated for Chinese Thousand rooms visitors starting in September 2020. 30

Macau’s Chief Executive, Mr. Ho Iat 25

Seng, delivered his Policy Address 20 for the Fiscal Year 2021 in November 2020. His address pointed out the 15 need to promote stable and healthy 10 development of the gaming industry, and to commence work on new gaming 5 concessions. With regard to a modern 0 1 7 services sector, Mr. Ho said that Macao 7 3 2 5 5 9 9 6 6 4 4 8 8 0 0 1 1 1 1 1 1 1 1 1 1 0 2 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 2 2 2 2 had a well-developed hotel industry 2 2 2 2 2 2 2 2 with advanced management systems. He expected Macau to enjoy tremendous Source: Macau DSEC / Knight Frank Research opportunities under the Greater Bay Area initiative.

Looking ahead, local market sentiment is expected to improve, given the CHART 21. Macau's five-star hotel performance stabilized pandemic situation in Macau Average Daily Rate Hotel occupancy rate and the government’s relief measures, ADR Occupancy which helped boost local businesses (MOP) rate (%) and the economy. With the easing of 2,100 100 travel restrictions and relaxation of visa 1,900 90 80 policies for Chinese mainland visitors, 1,700 the tourism industry has already 70 1,500 60 shown signs of recovery. The number 1,300 50 of visitors recorded a monthly increase 40 of 76.7% to 754,541 in March 2021. 1,100 30 The number of visitors is expected to 900 20 gradually increase, and the momentum 700 10 of the hospitality and tourism sector is 500 0 expected to pick up. 2017 2011 2013 2012 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 2008 2004

Source: Macau Hotel Association / Knight Frank Research

15 GREATER CHINA HOTEL REPORT 2021

TAIPEI

No. of 5-star hotel rooms New supply of 5-star hotel Average daily rate Hotel occupancy by 2020 (room) rooms in 2020 (room) (ADR) in 2020 rate in 2020 9,867 NT$3,464 38% 492 (-25% YoY) (-37 ppt)

OVERVIEW Against the backdrop of Taipei’s Daily Rate (ADR) was down 25% YoY to 4. accommodating people who were successful approach to the COVID-19 NT$3,464. The total operating income required to self-quarantine, a measure pandemic, the city became Asia’s of Taipei international tourist hotels in taken by the S Hotel and the Leofoo top-performing economy in 2020, 2020 plummeted by 46% YoY to NT$32.2 Hotel. The government provided hotels outstripping the other three big billion, with room income decreasing with salary compensation and tax economies in the region – Singapore, by 70%, and food and beverage income exemptions, and landlords offered rent South Korea, and Hong Kong. Taipei’s declining by 25%. The number of reductions or allowed delayed rent economy achieved a growth rate of employees dropped by 10%. payments to help hoteliers weather the 2.9% in 2020, attributable mostly to crisis. the semiconductor and manufacturing At the beginning of the outbreak, industries. Despite the overall economic large-scale events and gatherings, Taipei managed to contain the stability, the local tourism and hotel such as exhibitions and sports events, coronavirus successfully because of sectors was badly affected because of were completely cancelled and banned strict enforcement of border controls. the frozen inbound tourism. in Taipei, so shopping malls and Domestic social gathering restrictions restaurants saw a drastic decline in were lifted, and economic activity According to official statistics, visitor patronage. Most companies adopted a gradually recovered, resulting in arrivals to Taipei dropped significantly remote work strategy, which allowed an economic growth rate of 2.9% in to 1.4 million in 2020, down 88.4% YoY employees to work from home, and a tumultuous 2020. To stimulate as a result of the border controls. Of banned domestic business trips. As a the domestic tourism industry, the these, 34% were from New Southbound result, hotel reservations in Taipei City government launched a number of countries, 20% were from Japan, 13% were cancelled completely, causing tourism initiatives, which helped to were South Korean nationals, 13% came extremely low hotel occupancy. To reinvigorate the hotel business in central from Hong Kong and Macau, and 8% cope with the predicament amid the and southern Taiwan. Hotels in Taipei, were from the Chinese mainland. In pandemic, some of the following on the other hand, were highly reliant short, the tourism industry was severely measures were taken by hotel operators on international tourists and business hit with unprecedented challenges in to reduce operating expenses: 1. travellers. To increase sales, hotels in 2020. suspending operations, and placing Taipei launched various promotions, employees on furlough until the including dining and accommodation For hotels in Taipei City, 2020 was pandemic situation improved; 2. discounts, two nights with one night the toughest year in recent history. closing down most of the operating free, and working with key opinion The average occupancy rate of Taipei space and using a skeleton crew; 3. leaders and influencers on social media. international tourist hotels fell to 38% ceasing operations permanently; and from 75% in 2019, and the Average

16 GREATER CHINA HOTEL REPORT 2021

SUPPLY AND CHART 22. Taipei's international overnight visitor arrivals International overnight visitors YoY growth

Million YoY growth DEMAND people (%) In 2020, despite the COVID-19 40 40 pandemic, three luxury hotels opened, adding 621 rooms: Hotel Indigo Taipei 20 20 North (149 rooms) in January, the 0 0 Mitsui Garden Hotel Taipei Zhongxiao 2017 2011 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 2008 (297 rooms) in August, and the Hotel -20 2004 -20 Resonance Taipei (Tapestry Collection -40 -40 by Hilton) (175 rooms) in December. On the other hand, the Capital Hotel -60 -60 (129 rooms) ceased operations in 2020, bringing the actual supply of -80 -80 international tourist hotels in Taipei in -100 -100 2020 to 492 rooms. The overall supply of five-star hotels reached 9,867 rooms. Source: Tourism Bureau, Republic of China, Taiwan / Knight Frank Research

O U T L O O K CHART 23. Taipei's five-star hotel stock The World Tourism Organization No. of hotel rooms (UNWTO) predicted that it will take Thousand rooms about three years for the global tourism industry to fully recover. Since Taipei 12 is highly dependent on international 10 travellers, a lot of hotel development plans have been suspended. New 8 supply in 2021 will include only the 6 Gracery Hotel Taipei (248 rooms) and the Hotel Metropolitan Premier Taipei 4 (288 rooms). Some hotels, such as the Leofoo Hotel, the San Want Hotel and 2

The Ambassador Hotel Taipei, are being 0 9 8 7 6 5 4 0 1 2 3 4 5 6 7 rebuilt amid the pandemic, reducing 1 8 1 9 2 0 2 0 2 0 2 0 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 1 2 0 2 0 2 0 2 0 2 0 2 0

room supply by 900. They are expected to reopen with a new image within three Source: Tourism Bureau, Republic of China, Taiwan / Knight Frank Research to five years when the pandemic eases.

CHART 24. Taipei's five-star hotel performance Average Daily Rate Hotel occupancy rate

ADR Occupancy (NT$) rate (%)

6,000 90 80 5,000 70 4,000 60 50 3,000 40 2,000 30 20 1,000 10 0 0 2017 2011 2012 2013 2015 2019 2016 2014 2018 2010 2007 2020 2005 2009 2006 2008 2004

Source: Tourism Bureau, Republic of China, Taiwan / Knight Frank Research

17 We like questions, if you’ve got one about our research, or would like some property advice, we would love to hear from you.

RESEARCH & CONSULTANCY

MARTIN WONG LUCIA LEUNG Director, Associate Director, Head of Research & Consultancy, Research & Consultancy, Greater China Greater China +852 2846 4843 +852 2846 7184 [email protected] [email protected]

LAURENCE ZHU REGINA YANG ANDY HUANG Senior Director, Director, Head of Research & Consultancy, Director of Research Head of Research & Consultancy, China Shanghai & Beijing REPro Knight Frank, Taipei +86 21 6032 1769 +86 21 6032 1728 +886 2 8729 8798 [email protected] [email protected] [email protected]

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