China Green Development Group ordered a suspension of all ongoing hotel construction projects effective October 29, 2026, following reported net losses of 814 million yuan in the first half of 2026, compared to a profit of 157 million yuan the previous year, according to eu.36kr.com.
Specific Project Suspensions and Asset Transfers
The group ceased the second phase of the Xinjiang Huamei Resort hotel project and fully halted new supporting facilities construction for the Wen’an project phase two. The long-term hotel cluster plan for Wenchang Shanhaitian was also sealed. Meanwhile, the Changbai Mountain hotel asset package was delivered and removed from the company’s balance sheet. Additionally, the
99% equity of the Hangzhou Green Development Center in Qianjiang New Town was listed for transfer in November 2025 with a reserve price of 3.58 billion yuan, close to its net asset value.
Profit Declines and Occupancy Challenges
The gross profit margin of China Green Development’s new energy sector dropped sharply from 56.82% to 39.3% in the first half of 2026. Following the July 2025 opening of six hotels in the first phase of Xinjiang Huamei Resort, their average occupancy rate was below 20% in Q1 2026. The low occupancy, combined with high fixed costs, undermined profitability, indicating the collapse of the business model that
exchanged new energy investments for cultural tourism assets.
Strategic Shift in Hotel Asset Management
Hotels such as JW Marriott Marquis Shanghai Luwan, The Shanghai EDITION, and Four Seasons Dalian are classified as high-quality assets with brand premiums, targeted for operational optimization or revitalization strategies like REITs. In contrast, the Xinjiang Huamei Resort hotels are considered seasonal bottlenecks, prompting strategies focused on reducing low-margin group customers and cutting off-season fixed costs. The Hangzhou Green Development Center, initially planned for a 299-meter tower reduced to 190 meters in 2024, has its equity listed for near net asset value transfer.
Industry-Wide Hotel Asset Sell-offs
Other developers are facing similar contractions. R&F placed Hilton
Doubletree Resort Chengmai R&F Mangrove Bay and Hyatt Regency Hainan Ocean Paradise Resort Lingshui on judicial auction in October 2026 with starting bids 30% below original valuations totaling 873 million yuan, but attracted no bidders. Shimao sold Sheraton Hong Kong Tung Chung and Four Points by Sheraton Hong Kong Tung Chung hotels in October 2026 for HK$2.7 billion, less than half the initial asking price. The sale was creditor-initiated, with proceeds used to repay syndicated loans, and Shimao received no funds.
Changing Demand and Hotel Profitability Dynamics
The industry’s shift from reliance on corporate contracts toward leisure and high-net-worth individual guests has altered revenue dynamics. In
2025, China’s five-star hotels saw a modest 5% increase in revenue per available room, primarily driven by leisure travel. The proportion of corporate guests fell below 50%, intensifying competition for rooms. High maintenance costs of landmark, super high-rise hotels now burden developers, marking the decline of the old model where hotels served mainly to enhance real estate value rather than generate profits.
