The opening of Dorsett Hospitality International's first hotel in the UK - the seven-story Dorsett Shepherds Bush in west London - marks a major push by the Hong Kong-based hotel group to expand into global markets that have benefited greatly from the growing influx of Chinese mainland tourists. Provided to China Daily

Hotel group bets on growing influx of mainland Chinese tourists with drive into selective markets

Hotel group Dorsett Hospitality International (Dorsett) officially launched its first UK property on Monday, bidding on the influx of Asian tourists to the country, particularly those from the Chinese mainland.

The seven-story hotel in west London - Dorsett Shepherds Bush - has 317 rooms and features a wide range of Chinese-inspired elements from decorations to services to appease the tastes of travelers from the world's second-largest economy.

Winnie Chiu, president of the Hong Kong-headquartered Dorsett group, said the Chinese mainland, now both the biggest tourist source market and the fastest tourism growth engine globally, has become one of the priorities to consider within the group's expansion agenda.

The latest study led by the United Nations World Tourism Organization indicated that the Chinese mainland had consolidated its position as the world's largest tourism source market in 2013, with mainland tourists spending a total of $129 billion overseas during the period.

As a leading destination in Europe, on the other hand, the UK also reported a 6-percent increase in arrivals last year, with a substantial growth contributed by mainland travelers as well.

"We need to make tactful decisions on hotel location given that Chinese travelers are very selective," Chiu told China Daily in London on Monday. Encompassed by a top-notch shopping mall, easy public transportation access to the downtown Central areas and the airport, Chiu believes the location of Dorsett's first hotel properties outside Asia goes well with mainland travelers.

But the outcome has yet to fully reveal Dorsett's "Chinese ambitions". Since the hotel's trial operation in mid-June this year, mainland guests have roughly accounted for 20 percent of the occupants, according to Chiu. She didn't disclose the overall occupancy rate of the newly opened UK hotel, adding that any latecomer will always need some time to adapt to the new environment.

At the same time, the hospitality group is ready to open its second London hotel - Dorsett London City - its second UK property among a dozen of new hotels scheduled for launch on the Chinese mainland, and in Hong Kong and the UK in the coming years.

Dorsett will extend its reach to selective markets rapidly as Chiu is a firm believer that "market share matters most".

"In a market downturn when travel agents need to cancel orders, they won't cancel mine as we are big and we have a long-term relationship with them," she said. A diversified hotel portfolio in different markets will also help the group fend off risks when a particular region was in trouble, Chiu added.

The Hong Kong-listed hotel group, a spun-off from Far East Consortium International in October 2010, currently operates 23 hotels with 6,599 rooms in Asia and the UK, among which 11 are located in Hong Kong, making it the largest hotel operator in the city, according to Chiu.

Dorsett Hospitality International's share price closed at HK$1.39 at the close of trading in Hong Kong on Tuesday, unchanged from Monday's closing price, compared with the 0.29-percent decline in the city's benchmark Hang Seng Index on Tuesday.

Dorsett will continue to seek hotel land plots in Hong Kong to boost its market share in the city - a tiny place that Chiu said is already filled with numerous hotels.

Still, operating hotels remains a rather lucrative business in Hong Kong. Occupancy rates among Dorsett's 11 hotels in the city stood at between 93 and 96 percent on average, with the gross operating profit margin exceeding 60 percent, backed by the continuous inflow of mainland travelers, she said.

In October, the group lost a bid in a government tender for an estimated HK$2.4-billion hotel site in Tung Chung, where a regional shopping and leisure development is planned for mainland travelers.

Chiu believes the prospects at Tung Chung could be rosy in future, fueled by the government's transformation plan and Hong Kong airport's expansion schemes.

litao@chinadailyhk.com

(HK Edition 11/05/2014 page6)