China’s aviation and hospitality sectors have suffered a sharp drop in demand amid a return of Covid-19 restrictions after leading the world’s pandemic recovery for more than a year.

Hospitality data analyst STR reported a plunge in occupancy rates in China’s hotels in early August and airline association IATA noted a contraction in air travel.

STR reported average occupancy rates across mainland China in early August fell from 70% to 40% within a fortnight amid new virus outbreaks. Revenue per available room (RevPAR), the standard hospitality industry measure, fell to half the 2019 level.

At the same time, IATA reported China’s domestic market “returned to contraction” in its latest analysis of global markets despite the fact that China “continues to lead” the global economic recovery alongside the US.

IATA noted China recorded an 11% fall in domestic traffic in June as restrictions were reintroduced in several cities.

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