[photopress:TiansenIbis.jpg,full,alignright]A report in The Australian states international hotel chains are pushing into China’s second-tier cities in a bid to tap into potentially huge new markets.
According to a CBRE Research report on China’s hospitality industry, in 2000, five-star hotels in Shanghai and Beijing accounted for about 29 per cent of the 117 five-star hotels in China. However, by 2005, it dropped to about 25 per cent as hotel operators diversified into second and even third-tier Chinese cities.
As well as geographical diversification, international hotel chains were using lower-price brands to broaden their customer base in provincial China.
CBRE noted that the French hotel operator Accor launched its first Ibis Hotel, its three-star brand, in China’s Tianjin in 2003. Accor had reported occupancy rates of more than 90 per cent at the hotel throughout the year. The average occupancy was 74 per cent across its properties in China in 2005.
More recently, Accor announced plans to open 10 to 20 hotels in Sichuan between 2006 and 2012.
The InterContinental Group was plans to increase its network to 125 properties by 2008 to capitalize on the growing boom in local and foreign travel in China. The report also noted that 12 of the Shangri-La chain’s 21 hotels in China were already in second-tier cities. 14 the 31 new hotels Shangri-La Group will open globally between 2006 and 2010 will be located in China. Three are located in first-tier cities, namely Guangzhou, Shenzhen and Shanghai. The remaining properties are being developed in cities such as Chengdu, Xian and Wenzhou in China’s interior provinces.
Source: The Australian