Hospitality turns hot

Every major international hotel group is diving into the China market, which can only be good news for business travellers

For the international business executive visiting China, long gone are the days of government-run guesthouses with faulty plumbing, whimsical service standards, and staff looking at foreign guests with barely concealed suspicion. The country today is home to all the familiar five-star chains, providing the same services and amenities as they do in Paris, London and New York.

It is as yet nothing, however, compared to what visitors can expect to see in the runup to the 2008 Beijing Olympics. International hotel groups have caught the China fever in a big way, and the building boom going on right now will utterly change the hotel landscape over the next few years.

The numbers are astonishing. Take Accor, the Paris-based group which operates the luxury Sofitel and Novotel chains, along with the more budget-oriented Century and Ibis chains. The company's Asia-Pacific managing director, Michael Issenberg, told online hospitality network, ASIATravelTips.com recently that there was 'unprecedented momentum' in the China tourism industry. Accor currently has 24 hotels in the country. But by the end of this year alone, eight new hotels will have opened, and it plans to double its total to 50 by the end of 2007.

This story is by no means unique. Indeed, it reflects what can only be described as a rush into China, as the giants of the hotel industry jostle for a lucrative slice of not only the international executive traveller market but also the growing domestic leisure market.

'China is a huge priority for us in terms of global growth plans,' says Paul Kirwin, president of Carson Hotels Asia Pacific. 'We will be opening more rooms there than anywhere else over the next 12 months through our three brands - Regent, Radisson, and Park Plaza.'

While Accor's Sofitel chain is opening new hotels in Xi'an Xiamen, Suzhou, Shijiazhuang, Nanjing, Hangzhou, Hainan and Tianmu Lake in Zhejiang province, the Carson group is also in the race, with a slew of hotels of its own set to open in the coming months in Shanghai and Beijing. That is where big groups such as the Intercontinental (which also has the Holiday Inn and Crowne Plaza), Hyatt International (Hyatt Regency, Grand Hyatt and Park Hyatt), and Starwood (Sheraton, St Regis, and Westin) are keenest to grow as occupancy rates and room rates are soaring.

Meanwhile, Marriott International has been drawing applause for its exclusive JW Marriott hotels, its high-end Renaissance brand, the residential Marriott Executive Apartments and its more budget-oriented Courtyard by Marriott. The group's current portfolio of 24 hotels in China will grow to 29 by the end of next year, and there are reportedly another 20 in the pipeline.

The luxury brand with perhaps the longest-term view of the market is the Shangri-La group, which has 13 new China projects coming online in the years leading to 2008. Some of these are in second-tier cities where the other international brands would not yet dare tread, such as Baotou in Inner Mongolia (2007). This represents a shift from the hotel's earlier China focus, which centred on emerging economic development zones, such as Shenzhen, Pudong, Qingdao and Dalian, and is even stretching to new resort hotels in Sanya, Hainan Island, and on Zhejiang's Zhoushan archipelago.

Shangri-La's chief executive officer and managing director, Giovanni Angelini, points to the 'enormous potential for domestic tourism in addition to ever increasing inbound business and leisure travel,' in China.

Paul Kirwin of Carson echoes these sentiments, noting that 'the fastest-growing segment for us is local travellers. As the economy grows, so consumers are starting to gain greater spending power and travel more within their own country.'

But even if hotel chains are increasingly awakening to the needs of China's mobile middle classes, the result of that is likely to be a boon also to executive travellers, who not so long ago were being made to cope with reduced convenience and amenities when they left the safe shelters of Beijing or Shanghai.

And, besides, for most of the chains it is a two-pronged approach, as can be seen with the Hilton group, which recently announced its first Conrad and Scandic branded hotels in China would open in Beijing in time for the 2008 Olympics. The Hilton is simultaneously developing a 500-room Hilton Sanya Resort and Spa, due to open in December this year at China's Hainan island - the 'Hawaii of the East.'