Weakening Domestic Tourism Pressures Hotel Revenue in China
Domestic tourism in China is underperforming expectations, as evidenced by declining hotel revenue per available room (RevPAR). Hilton's RevPAR fell 2.2% year-on-year in Q2 and the broader industry saw a further 6% drop through July according to Goldman Sachs data. This reflects weakening demand with hotels slashing prices amid fierce competition on platforms like Trip.com. The slowdown contrasts sharply with strong performance in inbound travel and premium segments, but overall trends suggest that China's post-pandemic tourism boom is fading alongside broader economic stagnation. A three percentage point drop in occupancy rates combined with lower average daily rates has dragged down revenue across the sector. Analysts note a sharp decline in per-capita spending since Q3 2025 and highlight shifting consumer preferences toward unique or premium experiences amid stagnant wage growth. Price competition is particularly evident in popular summer destinations like Shanghai, Xinjiang, and Yunnan where budget options are widely available despite the presence of high-end accommodations. This trend underscores a broader macroeconomic slowdown affecting retail sales and consumer spending.
Topics: China Tourism Consumer Demand Hilton China RevPAR Decline