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Golden weeks ahead for hotels

Updated: 2010-07-28 07:59
By Liu Yi-ling ( China Daily)

Golden weeks ahead for hotels
From left to right: Foreign visitors find it easy to find a hotel room in Lanzhou, Gansu province. Ren Shishen / for China Daily Kempinski's new hotel in Yinchuan, Ningxia Hui autonomous region. Wang Xiaolong / for China Daily The Taihu Hotel in Wuxi, Jiangsu province.[ Cheng Binghong / for China Daily]

A dramatic increase in domestic and international tourism has led to a rise in the number of hotels. Liu Yi-ling reports.

Record numbers of travelers to China are finding there's no problem finding a bed for the night as new hotels open up all over the country.

The surge in demand is primarily being met in second- and third-tier cities, which are increasingly becoming magnets for domestic and international visitors.

Meanwhile, the World Tourism Organization predicts China will become the world's most popular tourist destination by 2020 and it is expected the next 10 years will be a "golden decade" of expansion for the industry.

Liu Erh-fei, managing director and chairman of Merrill Lynch in the China region, regularly travels around China and said he has noticed that international hotel chains have expanded aggressively.

Liu said it is no longer just the major cities, like Beijing and Shanghai, that have a range of hotels to choose from as major groups like Starwood Hotels have opened up branches in secondary cities.

"Now, wherever I travel, I can find a hotel I am familiar with," Liu said.

The German hotel group Kempinski, for example, is opening hotels in Yinchuan, capital of Ningxia Hui autonomous region, Huizhou in Guangdong province and Guiyang, capital of Guizhou province this year; while Hyatt Hotels is establishing itself in Wuxi and Xuzhou in Jiangsu province. Marriott has signed deals for seven new hotels, including Dalian in Liaoning province, Zhuhai in Guangdong, Fuzhou in Fujian and Kunshan in Jiangsu.

National Tourism Industry Association figures show that in 2008 there were record revenues from inbound tourism. But while second-tier cities like those in Heilongjiang, Shanxi and Anhui grew by 30 percent, first-tier cities such as Beijing and Shanghai saw relatively meager growth - indicating they are more mature markets.

Business prospects

Golden weeks ahead for hotels
Sheraton Guiyang Hotel is one of the five-star hotels in the capital of Guizhou province. [Wu Dongjun / for China Daily]

Starwood Hotels, the largest international high-end hotel group in China, has been expanding most rapidly.

Five years ago, most of the company's China hotels were in Beijing and Shanghai, but they are now scattered throughout China and the country has the largest number of Starwood hotels outside North America.

This year, Starwood is expected to open 24 new hotels in China and will debut two brands, W Hotels and The Luxury Collection.

"Starwood sees tremendous long-term growth opportunity in China and we are working with our proven development partners to build a best-in-class portfolio of hotels throughout this dynamic market," said Simon Turner, Starwood's president of global development. "We look on China as a key catalyst for our strategic global growth engine."

"Developing infrastructure and growing markets in these cities are making them very attractive," added Starwood public relations manager Angela Feng. "Most of our guests are flying over to these places for business meetings and deals."

This development is evident in Huizhou. In the first half of last year, Huizhou experienced strong economic growth despite the global economic crisis.

The city's pillar industries, electronics and petrochemicals, and its proximity to Hong Kong and Macao, make it a popular business destination.

But Huizhou's tourism industry has also been growing rapidly and in 2009 the annual influx of visitors during October's "Golden Week" hit a record 1.51 million people, including 20,000 foreigners, pulling in 428 million yuan ($63 million).

In response to this rapid growth, Sheraton Bailuhu Resort will open in 2012 to service the Sheraton Beach Resort, a 16 km stretch of white sand that opened in 2008.

The city's general tourism development plan anticipates there will be 10 five-star hotels and 20 four-star hotels by the end of next year.

Golden weeks ahead for hotels
Five-star hotels are developing rapidly in second- and third- tier cities. [Wu Dongjun / for China Daily]

The aim is to build the city into the primary leisure and travel destination in the Guangdong, Hong Kong, and Macao region.

It is a similar situation in Yinchuan, capital of the Ningxia Hui autonomous region, where the general manager of the Kempinski Hotel Yinchuan, Patrick Ritter, intends to establish the group's first international five-star hotel in the city.

The hotelier said the principal reason behind this move is the city's infrastructure development and investment plans to create a business friendly destination.

Ritter said the city was a business center because of its agriculture, natural resources and sustainable energy sources.

"With the investment and economic policies of the central government and the rapid expansion of the economy in Ningxia and other cities in northwest China there is substantial potential for an increase in the volume of traffic in the market," Ritter said.

A holiday mood

Golden weeks ahead for hotelsThe growing leisure market has also boosted the hotel industry, Ritter said.

"While the leisure market is relatively small (compared to the business market), we expect more domestic and international tourists. Yinchuan offers many exciting destinations, such as Helan Mountain, rock paintings and pyramid tombs."

Elsewhere, tourist locations, such as Sanya, Hainan Island, are booming, primarily because of domestic tourism. During the Chinese New Year, room prices at high-end hotels can rise from 200 yuan ($29.50) to 2,000 yuan.

"Everyone wants to go there now," said Liu Erh-fei, who regularly travels to Sanya on vacation. "It is the warmest place to go in winter."

"The aspiration of places such as Sanya is to become like Phuket or Bali," Liu said, "Why do people always want to go to Phuket? Because it has developed the cachet of being a tropical paradise to relax and sunbathe."

Liu Kaiqiang, director of the Sanya Tourism Association, said the city's aim is to become "one of the first-choice worldwide coastal destinations in the near future".

Looking beyond luxury

Growth in the tourism industry is not exclusive to luxury hotels. Budget hotels have also been rapidly expanding in secondary cities, providing economical and reliable accommodation, mainly for the domestic traveler.

"More Chinese are able to afford to travel around," said David Sun, chief executive officer of Home Inn, a leading budget hotel group.

He said Home Inn would open another 200 hotels this year, to add to its portfolio of 600-odd properties.

"It is a lot easier for people to get around and travel in these cities, due to the government subsidized development of transportation," said Vivian Chen, investor relations manager of 7 Days Inn.

She said that while guests at luxury hotels are an approximately 50-50 mix of international and domestic travelers, budget hotels are 90 percent domestic and generally younger.

"We not only have business people and families, we also have many students coming to our hotels," Chen said.

"A lot of my peers are traveling to China for internships and to study," said Liu Yi-wei, a Hong Kong student interning in Beijing. "We need somewhere cheap to stay."

"We have already seen the Great Wall and the Forbidden City, now we're looking for more," Liu said.

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