The high-end hotel market has become saturated in China, with industry-wide declines in average occupancy and daily rates this year.

In the first quarter, the average daily rate for five-star hotels slid 6.15 percent year-on-year, while the average occupancy rate was down by 7.8 percentage points, according to the National Tourism Administration.

"This year is very challenging for the industry," said Sun Jian, chief development officer for China of InterContinental Hotels Group Plc.