Citi: China Consumer – Travel Monthly: Jun '26 Hotel RevPAR (~-0.4% YoY) and Hainan Duty-Free Sales (+3.5% YoY)
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Key Views
RevPAR weakness was driven by occupancy contraction, with June OCC down 2.5% YoY, while ADR remained resilient at +2.2%. Economy hotels outperformed, with RevPAR up 2.4%, while high-end and luxury hotels saw RevPAR fall 1.8% and mid-scale properties dropped 4.1%. Hainan offshore duty-free sales improved to +3.5% YoY in June, accelerating from May's +0.4%. First-half duty-free sales grew 18.8%, supported by a 12.6% increase in buyer count.
Outlook
Outbound travel recovery remains differentiated: South Korea and Vietnam maintain growth, Thailand is recovering, Japan shows weak momentum, and long-haul destinations remain volatile. Citi expects inbound tourism trends to stay positive. Near-term summer risks include extreme weather events such as typhoons and floods that could suppress leisure demand.
Recommended Securities
- Atoz Group (ATAT.O): Rating 1 (Buy), target price $48.0, reported price $32.23. Citi favors Atoz for its strong growth, competitive mid-to-high-end positioning, and operational resilience. Valuation is based on 14x 2026E EV/EBITDA, a 10% premium to the China hotel sector average. Quantitative model flags high risk.
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