Top Biz News

Luxury hotel sector strong despite curbs

(Shenzhen Daily)
Updated: 2006-08-28 11:47

China's luxury hotel business is likely to grow strongly over the next five years, driven by booming business travel, property consultants Jones Lang LaSalle said Thursday.

Government efforts to cool speculation and encourage construction of more affordable housing should not impact investment in the fast-growing sector, said Andreas Flaig, executive vice president of Jones Lang LaSalle Hotels.

"Most of what these regulations are for is, in fact, to better control and maybe cool the residential market, less so the commercial market," he said. "However, the government's investment curbs may affect investors' procedures for purchasing hotel assets."

The number of four-star and five-star hotel rooms in Shanghai is likely to grow by some 8,000 rooms until 2008, and more investment should find its way to the sector leading up to the Shanghai 2010 World Expo, Flaig said.

Beijing's hotel market is likely to grow strongly ahead of the 2008 Olympics but lags the Shanghai market by four to five years, the firm said. Shanghai was home to 351 star-rated hotels at the end of last year, Jones Lang LaSalle said in a report.

China, whose hotel sector suffered from a slump in travel due to the SARS epidemic in 2003, is now Asia's hottest spot for hotel development, accounting for nearly half of all new projects in the region, U.S.-based industry tracker Lodging Econometrics said in June. Of the 386 hotels being actively pursued throughout Asia, 188 are in China, and 134 of those are rated four- or five-star, the U. S. report said.

Hilton Hotels Corp. said last month it plans to double the number of its hotels under management in China in the next several years. InterContinental Hotels Group Plc, the world's largest hotelier, early this year signed a deal to manage six hotels in Southwest China to boost its share in the market.