Non-traditional investors led to multiple closings, as buyer personas continued to expand. In 2023, Beijing's annual transaction volume amounted to RMB 33.7 billion. Private buyers accounted for over 50% of the total volume in the fourth quarter. China Jinmao successfully sold The Westin Beijing Chaoyang, a five-star hotel in the Liangmaqiao area, to Bohai Runze for RMB 2.8 billion.

Asset types remained diversified throughout the year, with a significant increase in the heat of C-REIT-related assets. Influenced by the office leasing market, the transaction volume of office properties dropped by 5% y-o-y, while they still accounted for 56.8% of the total transaction volume. With the expansion of the C-REITs pilot programme to include consumption-related infrastructure, the transaction volume in retail properties increased by several times as against last year. In terms of buyer type, investment demand has picked up and the share of transactions by investment buyers rose to 71%. “Private buyers, state-owned enterprises and other non-traditional market investors entered the market, demonstrating a richer source of buyers than before, ” said Jessie Xu, Operations Director of China and Head of Capital Markets North China, JLL. “As market expectations towards pricing continue to adjust, investment opportunities in core locations are expected to receive higher attention.”

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_{Note: *Hotel refers to the upscale hotel market. *ADR stands for Average Daily Rate and is inclusive of service charge. *RevPAR stands for Revenue per Available Room}

As of the third quarter, the number of domestic tourists in Beijing has exceeded the figures from the same period in 2019. However, the recovery of inbound tourists has been delayed significantly. According to the Beijing Municipal Bureau of Culture and Tourism, the number of domestic tourists in Beijing reached 250 million, an increase of 2.1% compared to the same period in 2019. Domestic tourism income amounted to CNY 430 billion, a decrease of 1.2% compared to the same period in 2019. In contrast to domestic tourist numbers, the recovery of inbound tourist numbers has been relatively slow. As of the third quarter, the number of inbound tourists in Beijing was 751,000, representing only 26.6% of the same period in 2019.

As of November, Beijing’s upscale hotel market has recovered 88.1% of its revenue per available room (RevPAR) compared to the same period in 2019. By November 2023, the occupancy rate (OCC%) in Beijing’s upscale hotel market reached 66.7%, with an average daily rate (ADR) of CNY 1,116 and a RevPAR of CNY 745. The ADR has reached the same level as the same period in 2019, while the OCC% and RevPAR are at 87.8% and 88.1%, respectively, compared to the same period in 2019.

The Beijing market maintains a relatively low level of new supply, emphasising the importance of effectively managing existing assets. Owners are urgently seeking to enhance the value of their hotels. In 2023, there will be no new supply of upscale hotels in Beijing for the entire year. It is projected that the Renaissance Beijing Haidian Hotel will open in the first quarter of 2024, making it the third Renaissance brand hotel established by Marriott International in Beijing. The stock era in the Chinese hotel market is gaining prominence, and in Beijing, the slow pace of new supply is particularly evident. The key concerns for hotel owners are revitalising their existing assets, upgrading and renovating their properties, and finding new ways to utilise them effectively.

The gradually relaxed visa policies are expected to boost the growth of the inbound tourism market, while some domestic high-net-worth travellers may turn to overseas markets. After implementing unilateral visa-free entry policies for six countries in December, including France, Germany and Italy, there has been a significant increase in the number of tourists from these countries. According to data from the National Immigration Administration, within three days of policy implementation, the number of inbound tourists from these countries increased by 18,000, and within ten days, it increased by 59,000. The number of incoming tourists per day has seen an increase of about 40% after the implementation of the visa-free policy. On December 7, Singapore announced a 30-day visa-free arrangement with China to strengthen personnel exchanges, based on increasing flights between the two countries. Russia also plans to establish a new visa-free group tourism agreement with China. The expectation of gradually relaxed visa policies will further boost China’s inbound tourism market.

Tony Liang, Senior Vice President of JLL Greater China’s Hotel and Hospitality Group, said, “Constrained by limited supply, the Beijing hotel market primarily consists of existing assets. In recent years, there has been a significant increase in demand from owners to transform inefficient spaces within their properties. Given the concerns about the macroeconomic trends, domestic travellers are still willing to travel but with more budget constraints. Meanwhile, there is a need to rebuild short-term spending confidence. The relaxed visa policies are favourable for the recovery of inbound tourism, although some high-net-worth domestic travellers may choose to go overseas. Based on the changing market environment, there has been a noticeable increase in owners’ demand for hotel asset management and initiatives to improve the quality and efficiency of their hotels.”

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