Greater Bay Area and the Bohai Bay ) have also experienced a surge in leisure demand , of which the YRD market is the absolute market leader .
The skiing industry is booming in the run-up to the 2022 Winter Olympics : The skiing industry has witnessed a trend of mutual growth driven by supply and demand . On one hand , investment in outdoor ski destinations and indoor ski resorts is very active , which has driven the expansion of the novice skier market . Chongli , an important event host destination for the Beijing 2022 Winter Olympics , has seen strong growth in investment in infrastructure and ski resorts , and has become one of the most important ski destinations following the Northeast China .
Construction of transportation infrastructure drives investment in new-build hotels :
The construction and expansion of new high-speed railway stations , new subway lines , new airports , and new integrated transportation hubs have brought many opportunities for the development and investment of hotels thanks to the expected large volume travelers generated by transportation hubs .
M & A outlook
In terms of M & A , we also note the following important
China Hotel Investment Market Sentiment Score
New Build
Source : 2021 China Hotel Investment and Asset Management Outlook , published annually by Horwath HTL China Note : The average sentiment score above is formulated from the survey data to better reflect hoteliers ’ expectations toward the hotel investment market . The sentiment score ranges from negative 100 to positive 100 . A score of negative 100 indicates a state of absolute pessimism , a score of zero indicates neutral expectation , and a score of positive 100 indicates a highly optimistic prediction . trends :
56
69
Hotel Renovation
58
Hotel Transaction
Pure hotel asset M & As are less active : Hotel assets in China have quite lower investment returns due to relative lower ADR levels impacted by the supply pressure .
100 % 90 % 80 % 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0 %
Very Active
44 %
New Build
Relatively Cautious
More Active
Expectations of Market Activity
Existing Asset Renovation
Very Cautious
43 % 37 %
Hotel Transaction
Steady Development
Source : 2021 China Hotel Investment and Asset Management Outlook , published annually by Horwath HTL China
Although there are still a considerable number of hotels in the market seeking to get out , it is difficult to reach a substantial deal due to the huge gaps in price expectation between buyers and sellers .
Restructuring and integration of hotel assets among SOEs : Most notably , China Rong Tong Group ( CRTG ) established China Rong Tong Tourism Development Group Co . ( CRTTD ) through the integration of military-run properties . CRTTD first consolidated more than 150 existing hotel assets , most of which are midscale and economy hotels .
The company is also responsible to renovate and upgrade hotel assets and establish an operating platform . But it will take time to see substantial progress as it is not easy to consolidate staff and interests of different parties . Some other large-scale SOEs are also consolidating their hotel business , including both assets and operating functions , to improve the operation efficiency and business performance .
Hotel operators seeking expansion through marriage with real estate groups : The most notable case is Yongle Huazhu , a new joint-venture platform established by Sunac China and Huazhu Hotels Group . The JV platform will take over Sunac ’ s investment projects of upper-midscale and above hotels that are currently under planning and development for the next five years , which might be beneficial to Huazhu for the presence and penetration in China ’ s upscale hotel market .
54 hotelsmag . com July / August 2021