Little room for growth among high-end hotels
Updated: 2013-10-03 09:29
By Wang Wen (China Daily)
The Double Tree by Hilton Hotel in Shenyang, Liaoning province. [Provided to China Daily]
Four Seasons Hotel Inc, which runs seven hotels in China currently, is building six new hotels in China in the next four years.
Even for the shorter term, international hotel operators are pinning their hopes on the China market, because compared with the world at large, China's economic growth is still very healthy.
China's economy is recovering, although growth is slower than in previous years, said Arne Sorenson, chief executive officer of Marriott International Inc.
Marriott International plans to increase its hotels in China from 61 at present to 121 in the next four years.
China's urbanization and fast-growing tourism industry also offer encouragement to high-end hotel operators.
Local governments' support is an important factor in the luxury hotel sector's growth in China, as well. Some cities, seeking to burnish their international image, woo global luxury hotel chains.
"Local governments want to upgrade the image of their cities and prefer big international hotel brands," said Sebastien Mariette, general manager of Kempinski hotels in Wuxi and Yixing, Jiangsu province.
Mariette said that almost 99 percent of the customers at his hotel in Yixing are Chinese and it is difficult to sell rooms in the city, although the food and beverage business is successful.
"Sometimes, cities only need a four- or three-star hotel, but the government offers incentives to attract luxury hotel brands," said Zhu. But government support is not part of the hotel industry's business model and cannot be for long, Zhu said, since the government doesn't care about whether the hotels can make a profit.
The Hilton Dalian Hotel in Dalian, Liaoning province. The average daily rate for five-star hotels slid by 6.15 percen year-on-year in the first quarter, while the average occupancy rate was down by 7.8 percentage points. [Provided to China Daily]