Forward bookings remain healthy, supported by the strong demand from both international and domestic travel. Corporate travel and business activity continue to be robust, despite some industries facing cost pressures. As of January 2023, global airlines are operating at only 11% of their 2019 capacity levels to and from China. This is expected to increase to 25% by April 2023. China is a key source market for travellers to many countries, and the return of flight capacity is expected to drive outbound travel. In 2019, Chinese travellers accounted for approximately 9% of CLAS’ guest count (about 4% in 1Q23) and we think this percentage will increase in the second half of 2023.
We forecast growth in ADRs to moderate as it has already surpassed pre-pandemic levels in some markets, and the driver for RevPAU growth going forward will be from higher occupancy. CLAS’ revenue growth has outpaced the increase in operating costs – electricity costs have increased, but it remains less than 10% of OPEX.