The extended Spring Festival holiday period has concluded successfully, with multiple metrics in China's domestic tourism market reaching historic highs. The closely linked hotel industry similarly demonstrated robust performance, marked by increases in both occupancy and room rates. Notably, this year's holiday period revealed a structural divergence characterized by smaller cities outperforming while tier-1 markets remained stable. The industry is shifting its focus from competing on location and hardware to emphasizing experience and operational efficiency, entering a new cycle where asset management effectiveness is paramount.
The sector enjoyed a strong start with rising volume and prices. According to the latest data from the Ministry of Culture and Tourism, domestic trips during the nine-day holiday reached 596 million, an increase of 95 million compared to the eight-day holiday in 2025. Total domestic tourism spending amounted to 803.483 billion yuan, a rise of 126.481 billion yuan year-on-year. The record-high figures for both tourist numbers and expenditure provided solid demand support for the hotel industry's steady growth.
Alongside the overall volume increase, an upgrade in consumer spending was evident. Data from Fliggy indicates that the average per-capita booking value for domestic travel during the Spring Festival increased by approximately 10% compared to last year. Notably, the average number of room nights booked per person in high-star hotels was close to three, reflecting a trend toward premium and longer-stay accommodation consumption.
Against this favorable industry backdrop, leading hotel groups delivered particularly strong performances. Based on core operational metrics from JPMorgan's hotel tracking data, companies such as Huazhu, BTG Hotels, and Atour Lifestyle Holdings Limited all achieved year-on-year growth in their pre-sold Average Daily Rate (ADR) for the week of February 16th, which covered the main holiday period from February 15th to February 23rd, continuing their strong momentum. Furthermore, looking at Revenue Per Available Room (RevPAR), industry monitoring data showed that mainstream brands including Huazhu, Jinjiang International, BTG Hotels, and Atour achieved double-digit year-on-year growth during the first six days of the holiday (February 16th to February 21st). The impressive performance during the holiday period has laid a solid foundation for the industry's development throughout the year, with several institutions expressing optimism about its future trajectory. JPMorgan believes the strong pricing power exhibited by the hotel sector during the Spring Festival is likely to persist beyond the holiday period. It anticipates industry-wide ADR and potentially RevPAR could achieve year-on-year growth in March, setting a positive tone for the second quarter.
A notable development was the emergence of a "smaller cities outperform, tier-1 markets hold steady" dynamic within the generally prosperous market. On one hand, hotel markets in lower-tier cities experienced explosive growth, becoming the core driver of the holiday accommodation market. On the other hand, performance in tier-1 cities was relatively muted, with prices stabilizing or even slightly declining, highlighting a divergence between city tiers.
County-level and third- and fourth-tier cities were the undeniable biggest winners of this Spring Festival hotel market. Industry data revealed that, benefiting from the extensive high-speed rail network and combined demand from family visits and short-distance travel, branded chain hotels in many of these cities, such as Ji Hotel, Lavande Hotel, and Atour, commonly saw occupancy rates exceed 90%. Some even achieved full occupancy for three consecutive days around the third to fifth days of the lunar new year. Cities with unique cultural attractions or viral social media appeal performed exceptionally well. For example, in the Chaoshan area of Guangdong, boosted by the popularity of traditional Yingge dance performances, hotel bookings in Shantou, Jieyang, and Chaozon surged by 186%, 162%, and 135% year-on-year, respectively. Room rates followed suit, with prices at some mid-scale hotels rising from the hundred-yuan range to over a thousand yuan. On peak dates, rates approached twenty times the usual price; the Atour Hotel near Shantou MixC started from 3,377 yuan during the holiday, approximately five times its regular rate. According to a prior Ctrip report, cultural tourism revenue growth in "lower-tier destinations" like Chaoshan and Southern Fujian led the nation during the holiday. Smaller cities such as Pu'er, Jieyang, and Jingdezhen saw hotel popularity surge over 80% year-on-year, establishing themselves as core tourist destinations.
Beyond tourism demand, the trend of "staying in hotels when returning to hometowns" was another significant driver of the boom in smaller city hotel markets. Data from Qunar.com showed that hotel bookings in non-tourist county towns increased by over 60% during the holiday, with many traditional population hubs and labor-exporting counties seeing bookings double. For instance, Linquan County in Fuyang, Anhui, saw a 1.4-fold increase; Hanshou County in Changde, Hunan, saw a 1.3-fold increase; and Lingshan County in Qinzhou, Guangxi, also saw a 1.3-fold increase. Industry analysis suggests that younger generations returning home now place greater emphasis on personal space, preferring not to share accommodations and seeking to maintain social boundaries, thus creating this new trend. Data from the Asia Hotel Big Data Research Institute supports this view, indicating strong demand for multi-bedroom units like 4-bedroom/4-bed and 3-bedroom/3-bed configurations during the holiday, with bookings rising 84% and 72% year-on-year, respectively. The popularity of these room types indicates that families traveling together are no longer willing to "make do," fully releasing the demand for quality in family travel.
In contrast to the booming smaller city markets, tier-1 city hotel performance was relatively flat. Prices at some high-end hotels in cities like Beijing and Shanghai were generally stable or even slightly lower compared to usual rates; for example, holiday rates at the InterContinental Shanghai Jing'an and the China World Hotel in Beijing were lower than on regular days. This was primarily due to the large outflow of permanent residents during the holiday, leading to a temporary reduction in accommodation demand, coupled with the ample supply of hotel rooms in tier-1 cities, which helped stabilize price fluctuations.
The market divergence points to a fundamental restructuring of the hotel industry's operational logic. The traditional belief that "major city equals high value equals high price" has been challenged by this year's Spring Festival performance, which suggests that pricing power now lies with destinations and products that offer popularity, unique experiences, and distinctive characteristics. This signifies that the industry may be moving past an era of relying solely on peak seasons for revenue and entering a new cycle that tests asset operation efficiency, with the core of competition undergoing a fundamental shift.
Current consumption trends show that the logic behind consumer spending has fundamentally changed, with a greater willingness to pay for emotional value, while traditional premiums for hardware are diminishing in importance. Data from multiple OTAs indicates that while the lead time for hotel bookings during the long holiday extended by an average of 10 days compared to previous years, the cancellation and rebooking rate hit a record high. This consumer behavior of frequently changing bookings forces hotels to adjust prices dynamically. Factors like location and room size, which traditionally supported price premiums, are now less effective, and their influence on pricing power is further weakened by OTA platforms and price comparison algorithms.
Conversely, hotels that significantly outperformed the industry average in RevPAR generally broke free from standardization. By offering differentiated experiences and contextualized services, they generated positive word-of-mouth on social media, firmly securing market initiative. Facing these new trends, seasoned hotel investment experts suggest that investment and operational strategies urgently need upgrading, requiring a balance between traffic influx and carrying capacity. While some niche cities experience tourist surges due to unique cultural appeals, shortcomings in infrastructure, public services, and price control become apparent, highlighting issues of supply-demand imbalance. Using Shantou as an example, the city's approximately 25,000 hotel rooms struggled to accommodate a single-day tourist influx exceeding 100,000 people. This significant gap presents a challenge but also an important opportunity to drive the standardization, professionalization, and branding of hotels in many small and medium-sized cities.
For hotels in tier-1 cities, the imperative is to proactively break from traditional path dependency, accelerate transformation, gradually reduce reliance on单一的 business travel demand, deeply explore local leisure consumption needs, and create thematic, distinctive experience products to adapt to the new consumption structure.