Top Biz News

Competition heats up in hotel market

By Ding Qingfen (China Daily)
Updated: 2006-09-27 09:17

The 2008 Beijing Olympics are the catalyst for foreign hotel groups' growing interest in China's hotel sector since 2005, and the trend is set to continue in the lead-up to the Games and after 2008, said Li.

And hotels in Beijing and Shanghai are already enjoying brisk business.

Last year, Beijing's five-star hotels had an average daily revenue (ADR) of 1,204 yuan (US$150) and occupancy rate of 75.3 per cent, their highest since 1994. The highest revenue per available room (RevPAR) was 907 yuan (US$113), according to a report issued in May by Jones Lang LaSalle Hotels, a leading worldwide service provider in the hotel and tourism sector.

In 2005, ADR for Shanghai's five-star hotels reached a record high of 1,649 yuan (US$206), as did RevPAR, which climbed to 1,200 yuan (US$150) for the first time since 1993.

Except for Shangri-La, which owns most of its hotels with equity, the other international hotel groups conduct business by managing properties without equity.

Among China's 11,180 hotels, only 14.55 per cent are managed by hotel chains, according to China Merchants Securities. That compares to 80 and 50 per cent in the US and the Europe respectively. The lack of domination by local chains means international hotel groups have many opportunities to exploit.

Besides major cities, foreign players are also starting to look to China's emerging secondary cities such as Dalian, Tianjin, Guangzhou, Shenzhen and Sanya.

Competitive edge

"It was wise of us to choose Marriott at first, and we are very happy to be able to continue the partnership," said Feng Jing, chairman of Guangzhou's China Hotel.
Marriott began managing the hotel in 1998, and the two sides renewed the contract this year.

"Its powerful branding, marketing and talent development strategies have significantly helped us in management and development," said Feng.