The COVID-19 pandemic shook up the hospitality industry. Some giants recently unveiled their financial results for last year. Most saw their performance halved, with some seeing their revenues dropping 30 to 50 percent. But despite the slump, companies remain bullish on China.

Data from China's Hospitality Association (CHA) showed the hospitality sector has recovered to about 70 to 80 percent of pre-pandemic levels. And the upper-midscale hotel market in China has seen robust growth even during COVID-19.

For example, U.S. hotel giant Hilton continued its quick expansion in China in 2020, especially in the upper-midscale category. Hampton is one of its upper-midscale brands. They opened 53 new Hamptons in China in 2020 alone, including three in Beijing. The figure is pretty amazing, amid uncertainties from the China-U.S. trade relations and at a time when the COVID-19 pandemic has badly impacted the hotel industry.

Nick Xu, the Hampton manager near the World Trade Center, said the occupancy rate has been satisfactory after the pandemic was put under control in China. The market has recovered very rapidly after this Spring Festival, as evidenced by the nearly full occupancy in recent few days.

The upper-midscale hotel is expected to grow in popularity in China less expensive than a luxury hotel and of better quality than an economy hotel. Experts said the growing demand for this hotel segment is fueled by the expansion of China's middle class and the overall upgraded consumption capacity of Chinese consumers.

Han Ming, CHA director, said: "Compared to developed countries, China lacks in the area of upper-midscale hotels. Developed countries see more than 50 percent of their hotels in this category. But China has only over 20 percent in this category. Luxury and economy hotels are ample here in China. So in the future, some economy hotels will need to be upgraded. We also need to invite more foreign brands into this sector."

Domestic hotel operators are also aware of this gap. 35-year-old Jia Chao is a second-generation hotelier. His "Film Hotel" has expanded to over thirty locations around China. Each guest room is equipped with a film screen, and each hotel has thousands of hi-definition films on offer. Jia said living in a "film hotel" gives guests a sense of surprise, with those under 30 years old accounting for over half of his customers.

"I hope there are some diversified competitions, giving guests more cultural enjoyment. Now people's basic life needs have been satisfied. People need some out of box experience when they are on a trip. Here in 'Film Hotel', guests can see different movies, experience different kinds of rooms," Jia said.

The number of people traveling domestically in China has been on the increase for years before COVID-19 hit, up 10 percent yearly on average. 

In 2015, China overtook the U.S. to become the world's largest business trip market, with 1.9 trillion yuan ($292 billion) spent that year.

And as expectations grow that the global COVID-19 situation will ease with vaccination rollouts, both domestic and foreign hotel brands here are gearing up for a future travel boom.