In 2025, China's hotel industry finds itself at a challenging and transformative crossroads. The tourism market is bustling with activity, and the data appears "hot and sizzling." According to figures from the Ministry of Culture and Tourism, both domestic tourist trips and tourism revenue maintained year-on-year growth in the first three quarters of 2025, while the inbound tourism market continued its recovery. However, for hotel operators within the sector, 2025 was a year of forging ahead under pressure. This is a contradictory year where "prosperity" coexists with "pressure": on one hand, holiday occupancy rates repeatedly hit new highs, while on the other, RevPAR (Revenue Per Available Room) growth remains sluggish; on one hand, major groups accelerate their race for market share, while on the other, existing hotel assets frequently change hands. It can be said that continuous expansion on the supply side and uneven recovery on the demand side have kept the industry operating under pressure. "The keyword for the hotel industry in 2025 is not recovery, but a continued downturn against the backdrop of oversupply," Zhao Huanyan, a senior economist in the tourism and hotel industry, stated.
Behind the "K-shaped divergence" lies not a switch to prosperity, but a structural mismatch. In 2025, "K-shaped growth" became a key term in discussions about the hotel market. Tier-1 cities, core business districts, and certain holiday periods experienced phases of full occupancy, while a large number of mid-to-low-end hotels and projects in non-core areas remained under sustained pressure. However, in Zhao Huanyan's view, this "K-shape" is more of a superficial phenomenon. "The high-end segment hasn't truly surged; a downturn is common to all hotels, just to varying degrees. The fundamental reason is still that supply severely exceeds demand," he emphasized, pointing out that the core issue facing the industry is the continued decline in operational performance amid oversupply. From the supply side, based on public data from the National Bureau of Statistics and the China Hotel Association, the total number of hotel rooms in China is already among the highest globally. Zhao Huanyan, in his research "Comparison of Chinese and Global Hotel Industries," notes that China's hotel industry has long passed the era of incremental growth and entered a typical stage of stock competition. By 2025, the staggering scale of China's hotel room inventory has directly intensified the battle for market share among existing players. Supply pressure is rapidly transmitting to the operational level. The "Q3 2025 Hotel Industry Operation Analysis" shows that overall industry performance continues to decline, with occupancy rates and revenue per room falling in some regional hotels.
This "involution" is evident not only among independent hotels but has also impacted leading companies. The feedback from the capital market is equally direct. Over the past two years, the stock prices of several listed hotel companies have experienced significant corrections. Taking Jinjiang Hotels as an example, its stock price has fallen by over 60% cumulatively within two years. Zhao Huanyan believes this is not an isolated case but rather a "concentrated release of structural industry pressures in the capital market." Concurrently, the turnover of hotel assets has noticeably accelerated. Whether it's a high-end resort hotel transferred at a low price after being open for only 14 months, or large enterprises selling hotel assets due to financial pressure, both reflect the real difficulties the industry faces under high supply pressure.
Chain expansion and limited service have become the main themes, with leading companies navigating the cycle. Against the backdrop of overall pressure, structural bright spots still exist, with the most certain trend being the continuous rise in the chainization rate and the emergence of limited-service hotels as the mainstream model. "Limited-service chain brands have become the mainstream of China's hotel industry; this is an irreversible change," Zhao Huanyan stated. The operational data of leading hotel groups also validates this assessment. Taking H World Group as an example, it delivered strong performances during several key holiday periods in 2025. During the May Day holiday, hotels under H World Group received nearly 6.3 million guests, with the peak overall occupancy rate reaching 103%; during the National Day-Mid-Autumn Festival holiday, cumulative guest arrivals exceeded 10.55 million, a 36% year-on-year increase. From an operational perspective, H World Group's hotel turnover grew by 14.3%, 15%, and 17.5% year-on-year in the first three quarters of 2025, respectively. By the end of the third quarter, the number of hotels in operation globally reached 12,702, with over 1.24 million rooms in operation. Jin Hui, CEO of H World Group, said, "Although macroeconomic uncertainties persist, we will adhere to a long-term perspective and continuously strengthen our brand positioning and service capabilities." In the accelerating process of chain expansion, supply chain efficiency is becoming a core competitive advantage. Addressing chronic industry challenges such as the lack of standardization in material selection and opaque pricing, H World Group officially launched the "Nine Service Commitments for the 'H World Easy Buy' Platform & Suppliers" on its 20th anniversary. These include specific clauses like "best price guarantee, price drop refund, and on-time delivery," aimed at eliminating trust games and boosting franchisee confidence. This kind of reform starting from the fundamental logic signifies that China's hotel industry is transitioning from extensive management to refined, transparent operations. Guo Derong, Chief Analyst at Madiàn Research Institute, believes that chain expansion is not just about scaling up; more importantly, it provides an outlet for existing assets. "On one hand, it enables the rebranding and renovation of independent hotels, improving products and services; on the other hand, it provides owners with relatively stable new cash flows." In Guo Derong's view, there is no simple "exit logic" for the hotel industry. "A complete exit is very difficult; chain expansion, instead, offers a practical path for owners to 'tackle the challenges head-on'."
In the high-end and star-rated hotel segment, international hotel groups continue their strategic layouts in core cities. In 2025, Hyatt announced the development of its first Andaz hotel in Central, Hong Kong. David Udell, President of Hyatt for Asia Pacific, stated that this reflects the group's long-term strategy of "continuously increasing investment in high-end and lifestyle hotels in core locations." However, several industry insiders pointed out that the high-end segment is not a safe harbor, as its investment payback period is being significantly lengthened.
Homestays and "Accommodation+": Non-standard Value and Resilient Growth. If traditional hotels faced overall pressure in 2025, then the homestay and medium-to-long-term stay sector became the most resilient and vibrant component of the accommodation industry. It can be said that in the non-standard accommodation field, homestays and "accommodation+" represent another important track. Data from Tujia shows that "slow itineraries and in-depth travel" became mainstream in 2025. During the summer, homestay bookings for stays of 7 days or more increased by 20% year-on-year, with the average length of stay reaching 11 days. Yunnan had the highest share of orders, while non-traditional destinations like Anqing in Anhui and Ordos in Inner Mongolia became "dark horses" due to their low cost of living and comfortable pace. Furthermore, the post-00s generation accounted for over 23% of medium-to-long-term stay orders, demonstrating strong spending power from the new generation. The boom in inbound tourism also boosted the homestay business. From January to mid-June 2025, hotels under H World Group alone received over 1.52 million foreign guests (a 72% year-on-year increase). Tujia data further indicates that foreign tourists are no longer confined to major cities but are advancing to "China Travel" experiences, with homestay order volumes in places like Baoshan, Yunnan, and Turpan, Xinjiang, more than doubling. Industry experts have a clear understanding of the nature of homestays. Zhao Huanyan believes that the characteristic of homestays is their integration with local culture and customs, making them unsuitable for branding. Guo Derong stated bluntly, "Branding homestays has always been a false proposition; they are non-standard. In the future, homestays will become the accommodation calling card for county-level cultural tourism, providing premium space and emotional value assurance for other products." In the exploration of the "accommodation+" model, cross-industry initiatives became more frequent in 2025. Guo Derong observed significant growth in scenarios involving pets, esports, etc. "The essence of 'accommodation+' is to create more possibilities for products. In the short term, it's mainly about adding value; in the long run, it involves continuously operating around lifestyles to form new product systems." Zhao Huanyan remains cautiously optimistic about this, viewing it essentially as a manifestation of cross-industry cooperation within the accommodation sector. To address the pain point of the "blind box" experience in non-standard住宿, technological innovation became key in 2025. Tujia announced that under its "Good Hosts, Good Homes" strategy, it is pioneering the introduction of AI technology into the homestay industry. This includes AI space selection, digital human hosts, and a pyramid system that uses big data and on-site verification to filter properties into "Preferred," "Strictly Selected," and "Premium" tiers. Data shows that the "Premium Homestays," accounting for only 1%, have an occupancy rate 22 percentage points higher than ordinary homestays. Chen Gang, CEO of Tujia, stated, "The integration of AI breaks through previous technical limitations, allowing good houses and good hosts to be better presented to consumers."
Looking back on 2025, China's hotel industry did not experience the anticipated comprehensive rebound but underwent a profound structural reorganization under pressure. Just as Zhao Huanyan summarized the year as one of "continued downturn against the backdrop of oversupply," he reminded the industry that it must still face the practical pains of falling stock prices and increased asset transfers. Guo Derong defined the keyword as "resilience." He believes that住宿 is not just a physical space but a leader of future lifestyles. Looking ahead to 2026, the challenges for the hotel industry remain severe, but opportunities lie within market segmentation. With the continued warming of China's inbound tourism, the chain expansion filling gaps in lower-tier markets, and the deep restructuring of operational efficiency by AI technology, enterprises that can focus on customer needs and continuously improve their products and services will gain stronger vitality. Guo Derong stated plainly, "Be fully prepared and keep the original intention. In the era of 'value deep cultivation,' only properties that can truly provide unique value can navigate the cycles."
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