International innkeepers still flocking to China
The current downturn in the nation’s high-end hotel market has not curbed international innkeepers’ confidence in China, as they continue their expansion plans.
“China certainly should be in the top two (out of Hilton’s worldwide markets) within the next five years,” Christopher Nassetta, president and CEO of Hilton Worldwide, said on Thursday.
The United States-based group had 43 hotels in five brands in China at the end of 2013. The market currently is in fourth place for the hotel group’s business.
But Hilton should have thousands of hotels in China in the long term, Nassettasaid, and the group already has 140 in the pipeline for the world’s second-largest economy.
In addition, two new brands, including Embassy Suites Hotels, could be introduced into China by the end of this year, he added.
But Hilton actually missed the most active period over the past decade, when international hoteliers were enjoying a remarkable expansion in China.
Most of Hilton’s top rivals havemany locations inChina, and they continue to develop in the smaller cities.
Marriott International Inc has 67 hotels and 111 properties under construction or planned in China, with quite a few located in second- and third-tier cities, including Hangzhou, Zhejiang province; Sanya, Hainan province; and Zhuhai, Guangdong province.
Intercontinental Hotel Group plans to double the number of its hotels across China over the next five years, said Richard Solomons, global chief executive of IHG, on the sidelines of a travel industry forum in Sanya.
According to the IHG, about 90 percent of its newly opened hotels in 2013 were located in second-, third- and fourth-tier cities.
“This reflects the alignment of the group’s development strategy to future industry growth drivers,” Solomons said.
However, China’s hotel market has stagnated since early last year, and experts are questioning whether the high-end hotel market is oversupplied in the country.
Statistics from the China National Tourism Administration show that in the fourth quarter of 2013, the average daily rack rate for five-star hotels in China decreased by 0.05 percent year-on-year, while the average occupancy rate was down by 5.23 percentage points.
“It was a very tough year for China’s hotel industry,” said Zhang Rungang, director of the China Tourist Hotels Association. He was pessimistic about this year, as well. “The market situation will not change in 2014.”
Zhang said that a main reason for the market decline was the shrinking of high-end consumption paid for with public funds, as the government released new regulations to combat corruption and extravagence.
The industry must make changes to survive, he added.
By July 2013, high-end chains comprised 56 percent of China’s total hotel rooms, according to STR Global, an international industry data and analysis provider.
On the other hand, international brands are not just eyeing the domestic market; they also are encouraged by the huge outbound travel figures from China.
Outbound tourism totaled 98 million trips in 2013 and will exceed 100 million this year, according to the China Tourism Academy.
“We will take advantage of this opportunity,” said Hilton’s Nassetta.
In order to attract more Chinese guests, Hilton launched a project called Huanying (Welcome) in 2011. The project includes a Chinese language service, Chinese restaurants, music and other services tailored especially for Chinese customers.
Marriott also is coming up with “Chinese-ready hotels” in cities that attract many Chinese tourists, such as New York City and Vancouver. These sites provide Chinese consumers with familiar food and Mandarin-speaking staff to better meet their needs.
Arne Sorenson, president and chief executive officer of the company, summed it up by noting that the whole world is competing for the Chinese tourist. Contact the writers at email@example.com and zhengxin@ chinadaily.com.cn