TURNING POINT FOR THE HOSPITALITY INDUSTRY
Individual business and leisure travelers will provide the much-needed growthmomentumfor Chinese hoteliers, even as prospects in the high-end segment continue to be bogged down by the government’s austeritymeasures, a newindustry report said.
According to the report released by global real estate services firm Jones Lang LaSalle Inc, individual business travelers accounted for about 40 percent of the overall hotel business in China in 2013.
“Individual business travelers will be the mainstay for the hotel industry this year also,” said Ye Feng, vice-president of Jones Lang LaSalle’s hotel and tourism real estate investment consulting department in China.
The percentage of individual leisure travelers also grew in 2013 compared with 2012, whereas the contribution from business groups declined due to the various government policies, Ye said.
The LaSalle reportwas based on responses received from269 hotels and management companies in China. About 53.9 percent of the respondents remained confident in the growth prospects for the industry in China in the long term, compared with just 2.6 percent in 2013. “This is a positive turning point for the industry,” Ye said.
Stable growth prospect and favorable policies fromthe government are the reasons cited bymost respondents for the renewed optimism, Ye said, adding that the whole sectorwas adversely affected by the decline in high-end consumption, especially in the luxury hotel sector.
ZhangRungang, director of the China Tourist HotelsAssociation, said the drop in high-end consumptionwasmostly due to the reduced government spending as a result of the austeritymeasures. “As a result, the industry had to make changes to survive,” he said.
Han Ming, head of China HotelAssociation, said the middle- and high -end hotels sawbusiness shrink by 20 to 40 percent in 2013, compared with the levels in 2012.
“Hotel companiesmust change their business models andway of operation by including supplychain, energy-saving and functional optimization,” Han said.
Customers check out Hilton promotional material at a global trade show in Shanghai. The hotel operator has 48 hotels under five brands and 140 hotels in the pipeline in China.