First Read: China Hotel Sector "Virtual tour takeaway: insights from hotel..."

研报英文原文证据摘录

First Read: China Hotel Sector "Virtual tour takeaway: insights from hotel..."

Global Research

10 July 2026ab

First Read

EquitiesChina Hotel Sector

Virtual tour takeaway: insights from hotel China

franchisees Lodging

Xin Chen

Analyst

xin.chen@ubs.com

Sector pressure persist +86-21-3866 8864

We invited a hotel industry expert to participate in our virtual tour. His key takeaways are Ingrid Zhang

as follows: 1) Q2 hotel sector operating performance fell short of expectations, and a Analyst

meaningful improvement remains unlikely in Q3; 2) Due to government regulations, the S1460517080003

sector supply growth has decelerated in H1, yet some leading hotel groups are ingrid.zhang@ubs.com

experiencing some pressure in Q2 hotel signings; 3) the payback period for franchisees +86-21-3866 8853

continues to lengthen, now exceeding 6 years for new franchisees. Beini Du

Associate

Hotel business: Q2 missed expectations; Q3 likely to remain under pressure S1460525090002

According to the expert, the Q2 hotel sector underperformance was driven by weak betty-za.du@ubs.com

+86-213-866 8753

consumption, a disappointing MICE (meetings, incentives, conferences, and exhibitions)

market, and continuous rainfall. Looking ahead to Q3 and Q4, the expert sees the sector Sukrit Friestad

will remain under pressure. Analyst

sukrit.friestad@ubs.com

+662-613 5732

Supply: growth moderating; some hotel groups face pipeline pressures

Regarding sector supply, the expert noted that the conversion of office buildings into

hotels is slowing due to tighter issuance of fire safety certificates and other permits.

However, some SOE and government properties are now being permitted to be

converted into hotels. As a result, total sector supply continue to grow, albeit at a slower

pace.