China Hotel: Lower Travel Costs Could Support Summer RevPAR

Research evidence excerpt

China Hotel: Lower Travel Costs Could Support Summer RevPAR

Deutsche Bank

Research

Asia Industry Date

China 2 July 2026

China Hotel

Consumer Industry Update

China Hotels

Lower Travel Costs Could Support

Summer RevPAR

Sammi Xu

2Q26 RevPAR moderates amid elevated travel costs Research Analyst

Travel demand in China remained soft during 2Q26, with macroeconomic +852-2203-5415

weakness and high airfares impacting both business and leisure travel. According

to STR data, China's hotel RevPAR growth decelerated from 4.9% YoY in April to

-0.2% YoY in May and likely weakened further in June as elevated oil prices resulted

in high travel costs. While the Average Daily Rate (ADR) continued to be the primary

support for hotel revenue, weaker traffic and lower occupancy were significant

drags in 2Q26. For H World and Atour, we estimate 2Q26 RevPAR growth to have

landed in the 1-2% YoY range, as a strong April was offset by a softer May and

June. This moderation was broadly in line with expectations following a robust first

quarter.

Fuel surcharge cuts signal lower summer travel expenses

Aviation cost pressures are easing as crude oil prices have declined to near pre-

Iran War levels. As such, fuel surcharges have been cut twice ahead of the summer

peak season, on June 5 and July 5. Effective July 5, 2026, surcharges would be

reduced to RMB50 for routes ≤800km and RMB100 for routes >800km, down from

their May peaks of RMB90 and RMB170, respectively. We expect these lower travel

costs to support leisure demand during the summer holiday period.

Favorable base and lower costs support summer RevPAR outlook

Based on our channel checks, the summer holiday travel season is anticipated to

begin in mid-July, following the start of school holidays around July 10. Near-term