[photopress:beinjing_lobby_1_2.jpg,full,alignright]According to Pearl Wang from Standard & Poor’s Equity Research, writing in Business Week, hotels can only do very, very well from the Olympic Games. With 500 days to go until the opening ceremony, anticipation is building for the 2008 Summer Olympics in Beijing, which run from August 8 to 24.
Beijing is expected to receive about 500,000 to 550,000 overseas visitors as it hosts the Summer Games. Standard & Poor’s Equity Research says that makes hotels a very attractive investment.
This US$40 billion event will increase China’s expanding tourist traffic, and will likely improve its already hot market for hotels. China ranks fourth on the list of top destinations, and some believe it could surpass the U.S. to become the top destination over the next 10 years.
China’s growing middle-class population is also spending more on vacations within China. Some major hotel companies stand to profit from this potential growth, in 2008 and beyond.
Tom Graves, co-head of U.S. consumer discretionary equity research for S&P, said, ‘Business and tourist travel will likely benefit from China’s growth, and it’s not surprising that there are significant growth opportunities available for hotel companies there. The Olympics will likely contribute to this growth.’
Today in China there are about 5,000 hotels with star ratings, holding about 701,700 available rooms. In comparison, the U.S. has about 50,000 hotels. This suggests to S&P that the market in China appears to have a lot of room for growth.
Source: Business Week