2026Q2-MSI·Hotel Market Sentiment Report

Occupancy Index Shows Signs of Stabilizing, Market Confidence Continues to Recover

In the second quarter of 2026, the national hotel market sentiment index rose to -9, up 12 points quarter on quarter and reaching a relatively high level over the past seven quarters. Meanwhile, the overall sentiment index remained below neutral. This suggests that the industry is still under pressure and that the recovery in market confidence has yet to be firmly established.

By sub-index, the Occupancy index turned positive, suggesting that market expectations for demand have become more stable. By contrast, the ADR and F&B Revenue indices improved to -17 and -24, respectively, but remained at low levels, suggesting that pricing and F&B performance have been slower to stabilize.

Regionally, South China (-2), the Northeast (-6), and East China (-7) outperformed the national average in overall sentiment. Among them, the Northeast posted the most pronounced quarter-on-quarter improvement, rebounding by 22 points, while South China remained ahead, indicating more stable market expectations overall. By contrast, Central China, the Southwest, and the Northwest remained at low levels.

Tier-1 Markets Sentiment Rises Broadly, Beijing Records a Clear Recovery in Expectations

In Q2 2026, overall hotel sentiment across Tier-1 markets improved from the previous quarter. Except for Shanghai, all other cities posted gains to varying degrees. At the sub-index level, respondents remained cautious on F&B Revenue, with expectations of year-on-year pressure deepening further.

Sanya continued to lead Tier-1 markets, with its overall sentiment index rising to 38, showing that peak-season performance and leisure demand continued to support operating expectations. Shenzhen’s overall sentiment index rose to 6, while its Occupancy index reached 22, indicating continued confidence in demand. In addition to business travel, weekend leisure demand and demand from nearby cities also provided support.

Beijing’s overall sentiment index rose 15 points quarter on quarter to -10, marking the sharpest improvement among Tier-1 markets. Although it remained in negative territory, market expectations improved. In Q2, Beijing enters a period with a high concentration of exhibitions and events. Large-scale events such as the Beijing International Automotive Exhibition are expected to support business travel, exhibition-related hotel demand, and related spending. Shanghai’s overall sentiment index stood at -8, unchanged from the previous quarter, with no further improvement in expectations. Guangzhou’s overall sentiment index was -15, up 4 points quarter on quarter. Although sentiment improved, expectations for ADR and F&B Revenue remained cautious. About 61% of respondents expected their hotel’s ADR to decline year on year in Q2, indicating weak pricing confidence.

City Vitality Gets a Boost from Ticket-Stub Spending, Sentiment Improves in Key Tier-2 Cities such as Qingdao

This quarter, sentiment across key Tier-2 cities remained mixed. Qingdao’s sentiment index rose to 1, up 26 points from the previous quarter, placing it among the leading Tier-2 cities. In Q2, local concerts and events remained active. Spending linked to the ticket-stub economy (where tickets from concerts, transport, attractions, and other events can be used for discounts and offers in later spending), together with rising inbound arrivals, helped lift market expectations. In this survey, more than half of respondents were also positive on inbound tourism, further supporting confidence in Qingdao’s lodging demand and overall operating performance.

Suzhou and Nanjing recorded overall sentiment indices of -15 and -18, respectively. Although both remained in negative territory, they improved from earlier levels. In the second quarter, the launch of the “Jiangsu Football City League”, together with related cultural and tourism activities, is expected to bring incremental demand to both cities and provide some support to market momentum.

By contrast, Chengdu, Chongqing, and Xi’an remained at relatively low levels, with weak ADR expectations. This suggests that amid continued hotel openings and intensifying supply competition, pricing pressure remains evident.

Domestic and Inbound Leisure Demand Remain the Main Support, Corporate and MICE Demand Remain Weak

This survey shows that leisure demand remains the main source of support for the hotel market. Among all demand segments, Domestic Leisure FIT recorded a sentiment index of 8, making it the only segment in positive territory. The sentiment indices for Domestic Leisure Group, Foreign Leisure FIT, and Foreign Leisure Group were -11, -13, and -22, respectively. Among them, Domestic Leisure Group improved markedly from -24 in the previous quarter, showing a more notable rebound. Foreign Leisure FIT and Foreign Leisure Group also improved slightly from -15 and -26 in the previous quarter. Spring holiday travel, off-peak leave, and demand from family and study trips provided some support for the domestic leisure market. Meanwhile, continued progress in inbound travel facilitation also supported the recovery of international leisure demand.

By contrast, improvement in corporate and MICE demand remained limited. Domestic Corporate recorded a sentiment index of -31, down sharply from -15 in the previous quarter. Foreign Corporate stood at -28, unchanged from the previous quarter, while MICE came in at -29, showing a slight quarter-on-quarter improvement. According to data from the National Bureau of Statistics, the non-manufacturing business activity index and the services business activity index rose to 50.1% and 50.2%, respectively, in March 2026. However, business activity indices for retail, accommodation, and food service remained below the neutral level.

Policy Support Continues, Supply Pressure and Geopolitical Disruptions Persist

This quarter, respondents continued to view Local Tourism Development Trends and Central Government Policy positively, with both indices remaining in positive territory and improving quarter on quarter. Since the start of 2026, policy measures related to service consumption, inbound travel, integrated culture-tourism development, school holiday arrangements, and paid off-peak leave have created a more supportive environment for the lodging industry.

By contrast, sentiment toward other external factors remained cautious. The index for Consumers’ Willingness to Spend stood at -27, indicating that demand recovery remains cautious. The indices for the Geopolitical Environment and Local/Global Stock Market Performance were -31 and -34, down 7 and 11 points quarter on quarter, respectively. Recent tensions in the Middle East and market volatility have weighed on industry expectations through international air routes, travel costs, and confidence in cross-border travel. Meanwhile, New Competitive Supply Additions remained the biggest drag at -51, showing that the dilution effect of new supply on the existing market has yet to ease.

Recovery in Business Travel Activity May Support an Improvement in Expected Q2 Performance

In this survey, the initial questions focused on year-over-year performance forecasts to reduce the influence of seasonal factors on sentiment analysis. To better capture practitioners’ assessment of short-term market fluctuations, we invited participants to predict potential performance levels for the first quarter.

In terms of actual performance, the national hotel market saw some month-to-month fluctuations in the first quarter. January was stable. Occupancy edged down in February, but ADR rose during the Spring Festival holiday, helping RevPAR remain resilient. In March, as the post-holiday market returned to normal, Occupancy recovered, while ADR fell back to a more normal level.

Based on this, respondents were relatively positive about overall operating performance in the second quarter. Survey results show that, at the median level, Occupancy is expected to rise by 8.0% from Q1, while ADR and RevPAR are expected to increase by 1.8% and 9.9%, respectively. With business travel activity picking up and leisure demand continuing to support the market, hotel performance is expected to improve further in Q2.