Room at the inn

With the 2008 Summer Olympics barely 12 months away, Beijing’s hotel industry is growing at full tilt. From January to April this year, nationwide hotel and catering revenue reached US$11.8 billion – up 18.4% from US$9.9 billion during the same period. Meanwhile, the Beijing Tourism Administration expects an additional 100 starred hotels by the end of this year, bringing the city’s total to 800.

Budget bonanza

China’s budget hotel sector is preparing for the deluge. According to the China Hotel Association’s 2007 annual report, the country’s 1,000 budget hotels doubled their capacity to 100,000 guest rooms at the end of 2006.

Jinjiang Inns, China’s largest budget chain, expects to more than double its size by 2010 to 500 hotels, up from its current 220. The chain is banking on the games providing it with a stepping stone to long-term growth, an attitude that seems to be shared by China’s hotel industry as a whole.

InterContinental Hotels Group, Greater China’s largest upscale hotel chain, currently operates 59 hotels open and more than 60 in the pipeline. InterContinental, with contracted projects in the Beijing Olympic Center and Qingdao Olympic Water Sports Center, is the only international chain to be granted the hotel rights to more than one of the official Olympic venues.

“The Olympics will definitely increase our inbound travelers every year after,” said InterContinental’s spokesperson Sharona Tao.

“Most international companies will tell you, ‘We do not just look at 2008.’ It’s a big event, and it will bring a lot of tourism, but we mostly look at long-term goals.”
Numerically, reaching those goals won’t be a problem, said Xu Jing, the United Nations World Tourism Organization’s (UNWTO) representative for Asia. The challenges, however, lie in managing the growth and keeping the tourism industry sustainable. Xu believes that the first posititve step that can be taken is boosting Beijing’s hotel capacity.

Sustaining growth

According to the Beijing Municipal Bureau of Tourism, the city had 570,000 beds at the start of this year, not nearly enough to house the 500,000 international visitors plus the one million domestic visitors the city is expected to receive during the games.

A possible solution is that the remainder of the visitors will be cared for by Beijing’s 4,000 unrated hotels – those that have not met the Beijing Tourism Administration’s one-star rating level.

These lower end hotels are not subject to the strict requirements of starred hotels, but are required to translate their names and service descriptions to English for the Olympics.

Another plan for China to sustain tourism after the Olympics is to divert tourist traffic – and income – from the biggest cities to the nation’s expansive countryside.

The Chinese government is promoting a “100-1,000-10,000” plan that will develop 100 counties, 1,000 townships and 10,000 villages for tourism. The China National Tourism Administration is pinning its hopes on this effort creating 1.5 million jobs in rural areas by 2015.

Following the 2000 Summer Olympics, host city Sydney experienced a tourism spike in 2002, when it topped the Olympic year’s figures by attracting 2.5 million international visitors – who averaged 16.6 nights per visit. But the positive effects faded the next year, with 2.3 million international visitors averaging 15.8 nights a visit.

“When the Olympics were first won by Sydney, some pretty serious claims were made that there was going to be an exponential demand for tourism in Australia, but that just hasn’t [happened],” said David Elliott, representative for the Australian Hotels Association.

“But comparing Sydney with Beijing isn’t comparing apples to apples. The Olympics in Sydney were a one-time excuse for people to come, whereas Beijing is this booming tiger economy right now.”

Optimism rules

Since the United Nations released its 1999 report predicting that China will be the world’s top tourism destination by 2020,  the tourism industry has been unflinchingly optimistic.

 The report, titled “Tourism 2020 Vision,” has become the stone tablet of the country’s hotel chains and government bureaus alike.

China’s tourism industry, worth US$33 billion in 2006, is well-positioned to become the leader in attracting inbound travelers. The hotel sector is rushing to meet this demand, but the Olympics is just the starting point for long-term growth.

Hotel standards

In China, three-, four- and five-star hotels are required to accept credit cards and have amenities like health clubs, swimming pools, business centers with internet access, and air-conditioning. Higher-end establishments will offer additional services, such as airport pickup.

One- and two-star hotels are required to have at least 20 rooms, but usually do not accept credit cards, and offer rooms both with and without private baths. Youth hostels also fit in this category.