Inland regions playing host to hospitality battle

China's inland regions are the next battlefield for hoteliers as leading international chains move into the second- and third-tier cities after years of rivalry in the big metropolitan areas.

US-based Sheraton Hotels Group and UK-based Crown Plaza Hotels & Resorts will open facilities in Changsha, Central China's Hunan Province, in the first half of this year.

But Su Jihua, sales director at Dolton Hotel Changsha, is not daunted by the prospect of increased competition.

Dolton Hotel Changsha is a five-star facility in the provincial capital of Hunan.

"Facilities are no longer the only and most important criteria for good hotels. Today's customers care more about service," Su said.

"Business travelers in particular trust a hotel that has experienced staff from the sales team to the waitresses," he said.

Su said the extensive experience his hotel has gained over the past decade in the city would be his best weapon in the battle.

Founded in 1998, the hotel is backed by Dolton Group Changsha, a local State-owned business conglomerate whose interests include retail, finance and real estate.

The 51-floor hotel has 450 rooms and mainly targets business travelers. Dolton Hotel Changsha, one of the four five-star hotels in the city, has an average occupancy rate of 85 percent.

Changsha's booming hotel market is being driven by the city's emergence as a hot investment destination for international investors, as well as the province's appeal as a tourist destination.

The actual foreign direct investment (FDI) in Hunan Province reached $2.6 billion last year, rising 25 percent over the previous year, according to the Ministry of Commerce. By the end of last year, 40 Fortune 500 companies had established a presence in the central province. The latest newcomers are Motorola and Nokia.

US wireless giant Motorola opened an innovation center in Changsha last September. The center, which focuses on developing wireless applications, is the company's latest move to transfer its research and development to China.

A month later, Finnish telecom firm Nokia formed a joint venture in Changsha with a total investment of 60 million yuan, to provide professional services such as telecom network design, planning, optimization and software development.

The hotel industry is also benefiting from the growing events sector in the city.

The fourth Pan-Pearl River Delta Regional Cooperation and Development Forum will be held in Changsha in June.

"That will definitely be a very big event for Dolton," Su said.

The Pan-Pearl River Delta framework, officially launched in 2004, encompasses Guangdong, Fujian, Sichuan, Guizhou, Yunnan, Hainan, Jiangxi and Guangdong provinces and the Guangxi Zhuang Autonomous Region, as well as Hong Kong and Macao.

The growth of tourism in the province is also providing impetus to the hospitality industry in Changsha.

More than 970,000 inbound tourists visited Hunan Province last year, increasing a whopping 35 percent. The province also hosted over 90 million Chinese tourists in 2006, up 28 percent on 2005.

Scenic spots like Zhangjiajie city in the northwestern part of the province continue to bring tourists. "Red Tourism" also brings visitors. The term refers to cities and sites that were important during the modern Chinese revolution for the birth of the People's Republic of China.

(China Daily 04/14/2007 page3)