China Economic Review
Charting China’s changing economic terrain · Since 1990
Hotel industry eager to expand
September 30, 2009
While the hospitality industry has suffered along with the rest of the economy in most countries, China remains one of the few places that are ripe for hotel expansion. Although looking at some of the occupancy figures for the five star hotels in the capital city, one wonders how accurate that statement might be.
Zhao Jinlin, a professor of hospitality and tourism management at Florida International University said, "The economic environment, the increasing middle-income population in China, the increase in disposable incomes and the fast development of infrastructure: All indicate the growth of China’s travel and tourism development in the years to come."
Perhaps it was with this in mind that several foreign hotel chains have decided to expand in China by way of rebranding.
The number of visitors to the Chinese Mainland fell this year for the first time since 2003, an expected result following the 2008 Beijing Olympics. But the numbers are expected to rebound in coming years.
Keith Barr, regional managing director of IHG for China, said, "China has become IHG’s largest market outside of the United States."
The group operates 48 Holiday Inn hotels and 22 Holiday Inn Express hotels in China, with many concentrated in cities such as Beijing and Shanghai. And there are also another 60 Holiday Inn and Holiday Inn Express hotels under development.
In addition to Holiday Inn, Hilton also plans to add another 33 hotels in China.
And earlier this year, Ramada Worldwide, part of the Wyndham Hotel Group, announced its continued expansion with two new hotels in China.
Trading Markets reports that one expert said: "The challenges they are facing are the competition among themselves and competition from Chinese local brands. Whoever provides the best products and services will win Chinese and world travelers."