On the path to recovery? China properties are seeing a strong appetite for domestic travel and brands with the highest level of consumer trust could be the winners as the uptick in demand arrives across the rest of the world

Hotels may be battling against a tide of empty rooms as occupancy levels fall down to single percentage digits, but many are finding ways to ease the pressure during these current difficult times. Some are bringing forward planned renovation projects, others diversifying into new markets such as selling rooms as private offices. Many are enhancing their social foundations by offering up empty capacity to the homeless, or more common to frontline health staff that are helping to fight the virus.

While the first stage of any crisis is to take stock and remove unnecessary expenditure, cutting all marketing spend is generally seen as the wrong thing to do. While, cuts can be expected in line with reducing costs and rightsizing the business, it is important that the company brand remains strong and in consumers’ mind for when the recovery begins.

These may appear dark days for many of us right now, but there are already encouraging signs from hotel properties across China, which are already quickly seeing strong growth in occupancy levels as the domestic restrictions have been lifted. With international connectivity reduced to a real minimum, China’s more mobile population now needs to stay in the country when travelling and are supplementing an already strong domestic market.

The Atlantis Sanya property on the country’s popular Hainan Island reopened for business on 28-Mar-2020 with an occupancy rate of 70%, Jim Qian, executive chairman and CEO of Hong Kong-listed Fosun Tourism Group, which owns Atlantis Sanya and Club Med recently told Forbes in an interview. The majority of those guests, he said, were from outside Hainan, mainly Shanghai, Hangzhou, Nanjing, Guangzhou and Chengdu.

This is significant for the entire travel and transport industry, driving accommodation and domestic air travel growth. What it shows is that after an almost three month period in lockdown there is a real appetite from the Chinese to travel. The Blue Swan Daily revealed exclusively last week that it is not just leisure travel, but China’s domestic corporate travel volumes starting to rebound.

Travel manager members of the Corporate Travel Community (CTC) and The CTC Corporate Travel Sentiment Survey from the Corporate Travel Community (CTC) highlighted how its travel manager members and a leading next-generation Chinese travel management company are seeing encouraging signs of the beginnings of a recovery in domestic corporate travel in China.

The initial lockdown in China saw many locals deprived of their Lunar New Year holidays and family weekend getaways. These individuals are now eager to maximise opportunities during the upcoming peak Labor Day holidays at the start of May. And that group of potential travellers is currently artificially high with domestic travellers joined by a huge outbound market restricted from travelling abroad and many Chinese students who have returned home early from their foreign studies.

The concern for any hotelier is that occupancy will likely have to rely on the strength of its home market. It is clear that domestic business will grow much faster than international, especially if border closures continue to be extended as new cases influence strategies and jeopardise any recovery – Australia, for example, has suggested its borders could be closed to both outbound and inbound travellers until 2021.

One factor that will influence the recovery is also consumer trust. That brings us nicely back to the importance of marketing and keeping brands fresh in consumers’ minds.

Independent hotel agent HotelFollower has recently analysed 100 of the world’s top hotel brands to identify which has the highest level of consumer trust, based on social media engagement and search volume interest among consumers. Measures being taken during the current coronavirus pandemic has influenced the findings with consumer views on brands being influenced by their handling of the crisis.

The Hotel Trust Index ranks Marriott International in top sport an incredible 2.6 million followers on Facebook, the most Twitter followers at well over 300,000, and the most searches of any other hotel brand with over a million people each month. Hilton, RIU Hotels & Resorts, Four Seasons Hotel and Resorts, and the Ritz Carlton make up the rest of the top five, while Holiday Inn, Best Western, Shangri-La Hotels & Resorts, Sofitel and OYO complete the top ten.

CHART – The top performers in The Hotel Trust Index which ranks the world’s top hotel brands by level of consumer trust, based on social media engagement and search volume interest among consumersSource: The Hotel Trust Indes from HotelFollower(Data: Mar-2020)

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