Starwood has big plans for China

PUBLISHED : Tuesday, 12 July, 2011, 12:00am
UPDATED : Tuesday, 12 July, 2011, 12:00am


American hotelier Starwood Hotels and Resorts expects to more than double its portfolio in China during the next three years, with plans to run 175 hotels in greater China in three years, up from the current 75, said chief executive Frits van Paasschen.

Most of the new openings will be located on the mainland, the world's fastest-growing domestic and outbound travel market. New York-listed Starwood is especially looking at the mainland's second- and third-tier cities, which it says will represent 90 per cent of the company's future growth in China.

'It's much more likely than not, given the past 30 years' experience, that China will continue to grow in a very strong pace,' Paasschen said. 'It's also more likely than not that Chinese demand for hotels and for our business will one day be larger than US [demand].'

Starwood runs about 450 hotels in the United States.

The American hotelier came early to the mainland, opening the Great Wall Sheraton in Beijing in 1985.

It will open seven more Sheraton brand hotels in China before the end of September. The new openings will be spread across the mainland, including Beijing, Xian, Chongqing, Zhenjiang and Hangzhou.

China has become a magnet for global hoteliers, who hope to profit from booming domestic tourism.

InterContinental Hotels, the world's largest hotel chain by number of rooms, expects its greater China operations to surpass its US business by 2025. It said last year that its China portfolio of 137 hotels would more than double in five years.

'There will be some turbulence along the way,' Paasschen said. 'But as we open hotels, we open with an eye towards their success over the 20, or 30 or 40 years we have in the management contract.'

Starwood predicted that the number of China's outbound travellers would almost double to 100 million by 2015.

China's purchasing power has grown along with its economy.

According to brokerage CSLA, the greater China region will become the world's largest market for luxury goods in the coming decade with an annual growth of 23 per cent.