Spanish firm eyes 150 hotels in China

They would be developed by a joint venture between NH Hotel Group, the biggest hotelier in Spain, and Chinese airline giant HNA

NH Hotel Group SA, the largest hotelier in Spain, has entered the Chinese market with a plan to open 120 to 150 hotels by 2020.

The properties would be developed through a joint venture between NH Hotel Group and HNA Group, China's fourth-largest airline group and also the biggest shareholder in NH, says Federico Gonzalez Tejera, CEO of the Spanish chain.

"We spent some time to analyze the Chinese market and understand the consumers here before we entered the market," Gonzalez Tejera says, adding that this was the reason NH entered the Chinese market three years after HNA became a shareholder.

The rising middle class in China is expected to be a major factor in driving the world's tourism market and it is also an opportunity for NH to bring China into its global plan, he says.

The first two NH hotels in China are already under construction and they are expected to open in the second half of this year, says Markland Blaiklock, managing director of NH Hotel Group in China.

The hotels are located in Hainan province, the southern Chinese island that is the location of HNA's headquarters. One property in provincial capital Haikou, with 1,001 rooms, will be the largest NH hotel in the world, Blaiklock says.

The joint venture expects to develop 10 to 20 hotels in China this year and it has already started work on some projects in some first- and second-tier cities, he says.

The long-term target of NH is to build 120 to 150 hotels in China, Blaiklock says.

"It is ambitious, but realistic," he adds.

During the past three years, China's hotel industry, especially the high-end hotels, has suffered from oversupply and the effects of the government's tough anti-extravagance policies.

But some business insiders say the situation is getting better. Jones Lang LaSalle, the Chicago-based real-estate consultancy company, says that in 2015, the average occupancy rate of Chinese hotels was expected to increase by 3 percentage points to almost 60 percent from the previous year.

"China's hotel industry is recovering and most cities still have potential to grow," says Jesper Palmqvist, area director of hotel research company STR Global's Asia-Pacific region.

Palmqvist says leisure tourism will support the business growth of hotels in travel destinations.

Two brands of NH Hotel Group, including NH Collection and NH Hotels, have come to China targeting different groups of consumers, Blaiklock says.

NH Hotels, with three or four stars, will account for 60 to 70 percent of the group's hotels in China, since there is huge demand for medium-end accommodation in the country, Blaiklock says.

NH Collection, a high-end brand, will be located only in first-tier cities, he says.

wangwen@chinadaily.com.cn

(China Daily European Weekly 04/08/2016 page28)