# China's Hotel Boom



## hkskyline (Sep 13, 2002)

*Shanghai luxury hotel market heats up*
25 October 2009
Agence France Presse

The world's leading luxury hotels are rushing to expand in Shanghai ahead of next year's World Expo, with hopes high for the upscale travel sector in the Chinese financial hub despite the global downturn.

The opulent Peninsula, the only new building on the main part of Shanghai's historic Bund in 60 years, just opened, embracing the city's Jazz Age heyday with a chauffeur-driven 1934 Rolls Royce Phantom and a Great Gatsby-esque pool.

The Peninsula's owner, Hongkong and Shanghai Hotels Limited, is making a return to the "Paris of the East" where it was founded after a 60-year absence, but it is facing stiff competition.

Ritz Carlton is building a second hotel here, Hyatt already has three landmark properties and Shangri-La is expanding from one to four hotels.

Conrad, Jumeirah, Waldorf Astoria and the legendary Peace Hotel -- managed by Fairmont -- are all also preparing to enter the fray, with work done or nearly completed on each property.

"Is it madness?" asked Graham Kiy, general manager of the two-hotel Zendai complex designed by star Japanese architect Arata Isozaki.

A member of the Leading Hotels of the World, the complex is due to open in September 2010.

"The luxury travel sector itself has always been less affected by economic downturns. Luxury travel is a little bit down, but not as depressed as the three-star and four-star sectors," Kiy said.

He said occupancy at five star hotels was currently at 50-55 percent overall, rising to 60-65 percent at hotels with better locations.

The surge in luxury hotel openings -- which will add nearly 3,900 five-star rooms -- is linked to Expo 2010, which Shanghai will host next year. Seven million visitors, most of them Chinese, are expected to flood into the city.

"We're sure Expo will bring benefits to Shanghai in terms of visitors and media attention, but 2011 will be tough because there will be an oversupply of luxury hotels," Kiy said.

China has weathered the economic crisis better than any other travel market, said Philip Ho, Asia Pacific vice president for Leading Hotels of the World, whose latest property, the PuLi Hotel and Spa, just opened in Shanghai.

He points to research his company conducted earlier this year indicating that while globally more than 40 percent of people had cancelled vacations due to economic constraints, only 15 percent had done so in China and Hong Kong.

Fifty percent of Chinese and Hong Kong respondents to the luxury firm's survey said they would not change their travel habits due to the downturn and nearly 80 percent said they would not downgrade from five-star hotels.

"While the world has gone into a recession, China has not gone into a recession," Ho said.

The number of high net worth individuals in China surpassed the number in Britain last year to become the fourth largest in the world, according to research published by Merrill Lynch this month. China passed France in 2007.

China now has more than 364,000 people with more than one million dollars in liquid assets, the investment bank said.

That is a key figure for the luxury hotel sector, executives say -- and one that puts them at ease.

"China's a very big market and there's a place for everybody and everything," said the Peninsula's general manager Paul Tchen.

"With our arrival, we're providing another option ... Choice itself is a luxury."


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## hkskyline (Sep 13, 2002)

*Asians seek western training to help land plum hotel jobs
Global hospitality brands prefer workers with overseas experience *
Vancouver Sun
16 November 2009

Global hotel brands continue to be as focused as ever on the Asia Pacific, especially China, for tomorrow's growth. They are staking out prime locations and building luxury properties. Behind every grand opening, there is a fresh hunt for hundreds of foot soldiers: front desk clerks, room managers, food and beverage crew, and back-office bean-counters.

Increasingly, the training of these workers is moving beyond the college classrooms of Beijing and Shanghai, even with their Western textbooks and video links. Instead, the picture now includes everything from Switzerland's finest hotel schools to $40-a-night, budget motels in Alabama to the housekeeping department of a five-star, downtown Vancouver hotel.

Meet Shine Yan, 23, for example. She arrived in Vancouver from China's Henan province a few years ago to study English. She recently completed an eight-month hotel management course at Vancouver-based Sprott-Shaw Community College and is doing an internship here. It's mostly office work, but her English is improving and she gets to be a cog in a fancy chain.

"I want to try and stay and upgrade my skills here," Yan said. "If I go back to China, I know I can find a hotel job easily because I have [overseas] work experience."

Inculcating a sense of customer service is one of the toughest challenges for foreign hotels wanting to expand in China, according to Toby Chu, CEO of Vancouver-based CIBT Education Group, which owns Sprott-Shaw and also runs a school of hotel and tourism management in Beijing.

"There was a big boom of hotels like the Venetian opening in Macau [in southern China, near Hong Kong] before the [economic] crisis, but many of the new workers were just not trained up to international standards. During the entire first month, guests at the Venetian there were lining up for 45 minutes to check in while staff stood watching," Chu said.

Ada Guo, a native of China's central Hunan province, is taking introduction to hospitality, facility management, and food and beverage courses at CIBT's school in Beijing. By the time she leaves China for her first time ever next year to do two years of school and training in the U.S., she will know a formal table setting inside out and be able to print reports with the most advanced of reservation systems.

Still, the placements are luck of the draw and she could get plopped into a $40-a-night budget motel near Gadsden, Ala., like one of her predecessors did. "It's just about getting some U.S.-based advancement of what they have learned in China," Chu said. "At least it is overseas experience. When they go back, they may not immediately be hired by the Grand Hyatt, but it's a start."

"The challenge in China is getting the balance right for the service level," said Graham Kwan, CEO of Melco China Resorts, a Canadian-listed company, which is developing a set of mountain resorts in China.

Time magazine recently described Melco's Yabuli ski destination in northern China as having undergone a Cinderella-like transformation, rating it the best resort makeover in Asia. Kwan, in his time overseeing this, has seen a wide spectrum of hotel service and management.

"One of the first properties we looked at, they didn't wash the sheets. They just washed the sheets in the swimming pool," Kwan said. "Then you go into the big, international firms and they have a lot of expatriate managers -- guys with French cuffs and cufflinks. But there you have a gap too because they are sitting in offices, not really understanding how to run a business in China. And you have all the grey in between."

"The hardware is superior to anything you'll see, the level of luxury, for example," Kwan said. "The software is where it can fall apart, or not."

Kwan, who first started travelling to China more than five years ago as a Vancouver-based Intrawest executive, said he has hired some Chinese graduates of Les Roches, a renowned Swiss hotel management school that has a campus in Shanghai. "More and more local Chinese are getting trained overseas or working with a large chain and then moving into other areas," he said.

"We need people who know the Chinese market, but who have a better understanding of other cultures and languages," said Evy Meng, a Beijing-based training manager for Ibis Hotel, an economy chain that is part of Accor, the giant French hotel group which aims to open 50 hotels, more than 10,000 rooms, in Asia this year. "This kind of person is difficult to find, but more and more people are coming back [to China] from schools and hotels overseas.

Chu's CIBT works closely with the educational arm of the American Hotel Lodging Association, distributing its materials, teaching its programs, certifying and placing graduates in China with member chains, including names like Marriott Hotels, Hilton, Hyatt Hotels and Resorts, Holiday Inn, Westin Hotels and Resorts and the Shangri-La.

Most of these have their own internal training divisions, but the hyper pace of growth means there is room for the AHLA programs to serve as, at least, a solid first step, Chu said.

Ian Wilson, regional vice-president for Fairmont Hotels & Resorts in Asia, said that in gearing up to open the chain's Yangcheng Lake property near Shanghai, the hotel received some 12,000 applications, interviewed 3,000 candidates and offered about 400 positions. With a new hotel in Beijing and the renovation of an iconic one in Shanghai both on the near horizon, Singapore-based Wilson said that "if you are a P.R.C. [People's Republic of China] native and you have worked overseas and gained experience in a five-star hotel, the world is your oyster."


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## hkskyline (Sep 13, 2002)

*Budget hotels set for big expansion*
28 December 2009
Copyright 2009 China Daily Information Company. All Rights Reserved.

Exercising a public flotation in the United States is the latest trend in China's budget hotel industry.

Spurred up by the domestic consumption stimulus program launched by the Chinese government and a commitment to boost the tourism industry, China's budget hotel operators have never been hungrier than now for raising money to meet an aggressive expansion plan. And for them, the US stock market is a good choice.

In late November of 2009, Guangzhou-based 7 Days Inn, the third largest budget hotel group nationwide by network, successfully made its debut on the New York Stock Exchange, raising $111 million.

It was the second budget hotel group to list in the United States, following Shanghai-based Home Inn, which was listed in 2006 on the NASDAQ.

The listing by 7 Days Inn is just a beginning, and it is expected to spur a wave of initial public offerings (IPOs) in the US by the industry.

Hanting Inn, another leading budget hotel, is awaiting a listing at the NASDAQ, said industrial insiders. Early in 2008, high-level executives from Green Tree Inn said the company was mulling over an IPO, either on the New York Stock Exchange or the NASDAQ.

Right time for listing

"The time is ripe for Chinese budget hotels to go to the stock market. The earlier the better," said Alex Zheng, CEO of 7 Days Group.

The 7 Days Inn initiated its IPO preparation in late 2007 but the move was delayed by the global financial crisis. However, observers say this was a good thing for the company.

"We planned to list on the NASDAQ but now we are becoming strong enough to list on the main board after a year of expansion and improvement," said Zheng. The listing of 7 Days Inn is typical of moves within the sector.

"Many IPOs were grounded because of the global economic disaster. As the economic recovery for China is under way, the companies are naturally re-launching their IPO plans," said David Sun, chief executive officer of Home Inn.

In addition, their aggressive expansion plans are also forcing the budget hotels to grab as much money as they can.

Sun said Home Inn will have another 200 hotels under operation in 2010, from the current 600-odd properties. The chairman of Green Tree Inn said the portfolio of the brand will rise to 600 next year from 400 now.

Zheng, from 7 Days Inn, said that the company expected to surpass Home Inn and lead the local budget hotel market within five years. "We expect to have 1,800 hotels nationwide then," he said.

The expansion means handsome investment. "A budget hotel on average requires the injection of 6 to 7 million yuan ($878,708.88 to $1.03 million) so an additional 100 hotels will cost us as much as 600 to 700 million yuan," said Sun.

After the global economic doldrums struck, "overseas venture capital or equities, which were active during the past few years in the budget hotel sector, became quiet and are still waiting for better times", Li Xinjian, a professor from the School of Tourism Management at Beijing International Studies University.

"An IPO is a quick way to get money for these leading brands."

Apart from the Shanghai-based Jinjiang Inn, which listed domestically on the Shanghai Stock Exchange, many budget hotels are planning to go for listings in the US. "Listing overseas consumes more time, energy and effort but, if successful, it is a signal of how qualified you are and helps raise funds in a faster and more efficient way," said Sun.

Zheng, from 7 Days Inn, agreed. "Listing in the US will benefit us more in the long term by improving corporate governance and management," he said.

The listings of Chinese budget hotels are also invigorating the US stock market. "We were surprised to be warmly welcomed by the investors there," said Zheng.

On the first trading day, shares of the 7 Days Inn grew by 13.64 percent to $12.5, and Home Inn, the first US-listed budget hotel operator, has witnessed a share rise of nearly 64 percent to $36.18 from the opening price in 2006 of $22.

"We are not concerned about the price. When the network of the 7 Days Inn becomes larger, the price is bound to pick up," said Zheng.

During the past few years, the local budget hotel sector has been a hot spot for overseas venture capital and investors. In 2003, Home Inn raised funds from IDG Capital Partners and Sycamore Ventures, which paved the way for its massive expansion. The 7 Days Inn has received three rounds of injections from a slew of big names including Warburg Pincus, Deutsche Bank and Merrill Lynch.

Expansion, ripe time

The first budget hotel appeared in 1997, with Jinjiang Inn launching in Shanghai. But the industry did not take off until 2003 when a slew of brands were established amid a spree of expansionism.

According to the China Budget Hotel Website, Chinese budget hotels have increased to 2,800 in 2009 from 23 back in 2000 and the room number has surged to 313,000, up from 3,236 nine years ago.

"The industry is maturing, and another wave of expansion is coming," said Sun.

While the high-end hotel sector was badly hurt by the economic recession and is expected to suffer for quite a time, budget hotels have hardly been affected.

"To be frank, we have felt little negative impact," said Zheng.

During the period from 2007 to 2009, the 7 Days Inn's occupancy rate remained at close to "90 percent". "The figure surprised the American investors, but it's true," said Zheng.

As the corporate financial report showed, during the third quarter, Home Inn's revenues grew by 37.9 percent from a year earlier to 727 million yuan, and the performance was "much higher than expectation".

The company also announced the occupancy rate on average reached 97 percent during the third quarter in 2009, 11 percentage higher compared with the previous year.

"The last quarter of 2008 and the first quarter of 2009 were a bit of hard, but everything has turned good since then," said Sun.

The growth momentum for budget hotels will be "sustained", given that business for the high-end hotels including the five- and four-star hotels is "expected to be sluggish for quite a period", said Li.

"Many travelers will be flowing into the budget hotels from the high-end, thanks to the shrinking corporate budget," he added.

During the central government's economic working conference held in early December, President Hu Jintao said the exports would continue to make grim reading because there were no signs that the developed nations and China's trading partners would recover quickly. He also emphasized that the government would make all efforts to stimulate domestic demand for stabilizing the economic growth.

Further, the State Council in December released guidelines on promoting the tourism industry, outlining measures to improve the infrastructure and relevant products and services, and also boost tourism-related spending.

According to estimates in the guidelines, by 2015, the number of domestic travelers will grow by 10 percent annually, and the number of inbound travelers will grow by 8 percent a year. Expenditure on tourism will account for 10 percent of Chinese people's outgoings.

"Expansion and development will be the key words for the budget hotel industry," said Sun.

Looking ahead, Sun said Home Inn will focus on the second- and third-tier cities around China. "We are confident about these areas. More and more Chinese in smaller cities will be able to afford to travel around, encouraged by the government's policy," he said.

The guidelines on tourism also pointed out the government additionally encourages qualified companies in the industry to grow bigger and stronger through mergers and acquisitions.

"There will be more deals in the coming years," predicted Li. "Chinese consumers will be more critical about the service and products as the industry improves. As the Chinese saying goes, 'The fittest will survive'."


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## psledy (Jan 30, 2010)

China is becoming the world's top tourist destination, if you are planing to travel to China, I suggest you visit Beijing at first.


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## toddhubert (Jan 6, 2008)

I know that 5 star hotels in Guangzhou expands from 5 to nearly 20 in the past 5 or 6 years


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## hkskyline (Sep 13, 2002)

toddhubert said:


> I know that 5 star hotels in Guangzhou expands from 5 to nearly 20 in the past 5 or 6 years


Yes - there are quite a number of new 5* hotels especially in the new Tianhe financial district.


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## hkskyline (Sep 13, 2002)

*Hoteliers expand presence in China*
5 March 2010
Shanghai Daily

LEADING luxury hotel companies remain bullish on their prospects in China as they continue to expand their presence in the world's fastest growing economy.

The Ritz Carlton Hotel Company, which operates more than 70 hotels across the globe, announced on Tuesday that it will open two more hotels in China this year to cement its position as the leading luxury hotel brand in the country.

With the opening of The Ritz Carlton Shanghai, Pudong, and The Ritz Carlton, Hong Kong, the United States-based hospitality company will increase its China presence to eight hotels by the end of this year.

"We made the decision more than 12 years ago when we opened our first hotel in the country that China was strategically important to us and we have time and time again shown our commitment to and belief in China as a crucial business and leisure market," said Mark DeCocinis, regional vice president of The Ritz-Carlton Hotel Company.

The 285-room Ritz Carlton Shanghai, Pudong, located in the South Tower of Shanghai ifc, a landmark commercial development in the heart of Lujiazui, will officially open in May to coincide with the World Expo while The Ritz-Carlton, Hong Kong, is due to open in November as the world's tallest hotel, occupying floors 102 to 118 at the International Commerce Centre in Kowloon, the highest skyscraper in Hong Kong.

Raffles Hotels & Resorts, a luxury hotelier which opened its first China property in Beijing a few years ago, also said yesterday it plans to open two new hotels in Tianjin this year and in Hainan Province in late 2011.

"Globally, we plan to triple our portfolio over the coming three years," said Jeannette Ho, vice president of marketing and sales for Raffles.


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## hkskyline (Sep 13, 2002)

*IPO VIEW-Chinese hotel IPO faces economic tightening fears*

NEW YORK/HONG KONG, March 19 (Reuters) - Discount hotel chain China Lodging Group Ltd is emblematic of China's blistering growth, but it could be hurt if the government takes steps to prevent the world's third-largest economy from overheating.

China Lodging, which hopes to raise about $100 million in an initial public offering next week, has grown rapidly by renting budget rooms under three different brands for an average of 174 yuan ($25.49) a night.

The number of rooms the company had to rent increased 160 percent in 2008 and another 35 percent in 2009. At the end of December China Lodging had 28,360 rooms for rent, mostly in big cities in the heavily industrialized eastern part of the country.

Its occupancy rate in 2009 was 94 percent, up from the mid- to high 80s the previous two years.

China's hotel industry has grown rapidly as foreign tourist and business travel has increased and Chinese citizens are traveling more within the country as incomes grow.

Marriott International Inc , Starwood Hotels & Resorts Worldwide Inc and Hyatt Hotels Corp all beat fourth-quarter expectations in part on strength from China.

Chinese citizens are willing to spend on hotels during pleasure trips but budget hotels are the choice for businesses aiming to keep costs down.

"Budget hotels are growing popular among business executives," said William Lo, an analyst at Ample Finance Group in Hong Kong. "(However), we think there is an oversupply in the hotel industry."

China is taking moves to cool its explosive real estate sector and hotels are rumored to be next. On Thursday, the Chinese government said it would require some large state-owned enterprises whose core business is not in the property sector to withdraw from the business, in a move to try and cool the red-hot sector. 

Media reports said the government could next target the hotel industry that has assets worth hundreds of billions of yuan, given the huge number of players in the market.

"Clearly country-specific risk is a factor that investors are going to take into account and that affects the overall risk profile of the transaction," said Richard Truesdell Jr., co-head of the global Capital Markets Group at law firm Davis Polk & Wardwell LLP. The firm is an advisor for the offering.

A CHEAP ENOUGH PRICE?

China Lodging has not been immune to the financial meltdown. The company's hotels in Wuxi, Suzhou and Ningbo have seen a decline in business due to the global financial crisis because they rely heavily on international trade, the company said in its prospectus.

A late November IPO by Chinese discount hotel chain 7 Days Group Holdings Ltd could also give investors pause. The shares rose 13.6 percent in their debut but are now trading 6.7 percent below their IPO price. 7 Days Group had 28,266 rooms for rent as of Sept. 30.

"Chinese offerings have lost their luster," said IPO Boutique Senior Managing Partner Scott Sweet. "There's a lot of bad will right now with Chinese IPOs. U.S. investors have been hurt badly."

Sweet said investors are still smarting from losses in IPOs like Shanda Games Ltd , whose shares were hyped but are now 47 percent below their IPO price.

Sweet said China Lodging's price -- it plans to sell 9 million American Depositary Shares for between $10.25 and $12.25 each -- may need to be cut.

If the IPO prices at the midpoint of the expected range China Lodging will have a price-to-book value of 2.6 compared with 7 Days Group's 8.5 and Home Inns & Hotels Management Inc 's 3.9, according to IPOdesktop.com President Francis Gaskins. Gaskins expects the China Lodging IPO to do well.

BREAKING THE LAW

China Lodging, sharing characteristics with other Chinese IPOs, said in its prospectus that it might not be in compliance with certain Chinese laws.

The company said it does not hold land use rights or own any of the hotel properties it operates. As of Dec. 31 lessors failed to provide documentation for 46 properties.

It also holds several leases without the permission of the property owners or government authorities, it said.

China Lodging said it could be subject to fines and lease disputes for not registering with local housing bureaus and is uncertain whether it is running afoul of a labor contract law that has been in place since January 2008.

Such non-compliance issues may not be unusual among companies operating in China. 7 Days Group made similar statements in its prospectus.

"Goldman Sachs and Morgan Stanley are proceeding with the offering," said IPOfinancial.com President David Menlow. "Evidently it's not such a major concern."

Goldman Sachs and Morgan Stanley are leading the underwriters.

NO BLINDSIDING

China Lodging founder and Executive Chairman Qi Ji was co-founder of online travel services provider Ctrip.com and Chinese economy hotelier Home Inns, both of which are publicly traded on Nasdaq.

"It's not as though they're going to be blindsided by any of the metrics that are in the marketplace," said Menlow.

China Lodging is expected to price on Thursday. Other IPOs expected next week are telecom equipment maker Calix Networks Inc , First Interstate BancSystem Inc , crude oil and drybulk shipper Alma Maritime Ltd and chipmaker MaxLinear Inc .


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## MoreOrLess (Feb 17, 2005)

The main weakness in China's hotel's for me come down to two areas...

1.Maintenance - Seems that far too often a new property is opened and thats the end of any significant work with the result that things go noticbley downhill after a few years. I'd guess goverment funding maybe the problem here with grants for new building but few for maintenance.

2.Lack of character - This seems to be changing a bit with some of the high end hotels but compaired to say India or South East Asia most Chinese hotels seem to follow the same bog standard business model even in tourist destinations. That may suit domestic tourists I spose but westerners tend to look for something a bit more interesting.


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## hkskyline (Sep 13, 2002)

Hotels are not all government-owned. How can government funding be a key cause?


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## staff (Oct 23, 2004)

Yeah, what? That post doesn't make any sense whatsoever. 

Of course the government doesn't fund a Hyatt or a Shangri-La hotel for example. That's absurd. And I'm sure the international hotel chains don't neglect their China properties any more than their properties elsewhere in Asia and around the world. In any case, if there is any negligence going on it is those (foreign) chains that should be blamed and not "China" per se.


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## hkskyline (Sep 13, 2002)

*Marriott aims to double hotels in China by 2015*

SHANGHAI, May 24 (Reuters) - Marriott International Inc , the largest U.S. hotel chain, aims to double the number of Marriott brand hotels in China within five years and intends to introduce a lower-priced hotel brand in the near future.

Marriott, which currently manages 46 hotels in China, expects to have 60 hotels by the end of the year and 90 in five years, making China its second-largest market by number of hotels, Arne Sorenson, Marriott's president, said in Shanghai on Monday.

"Clearly by the end of this year, if not already, China will be the second-largest market for us," Sorenson told reporters.

Sorenson said Marriott also soon planned to introduce a lower-priced Marriott brand hotel in China that would be similar to Fairfield in the United States.

Sorenson said China contributed less than 10 percent of the group's sales but said its sales growth was in the double-digits.

Marriott posted a better-than-expected quarterly profit last month and said it expects room rates to rise this year.

The European debt crisis has not had a large impact on the tourism industry so far, Sorenson said.

"We have to watch and see the way the financial crisis works in Europe. If it's simply about sovereign debt and central bankers, it won't be much of an impact on the hotel business," he said.


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## peterrichet78 (May 26, 2010)

Interesting article on China's Hotel Boom.When I traveled for china I found that one is the best.Really love the food and luxurious facilities available over there.


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## juliaroberts (May 14, 2010)

the world's top tourist destination, yes sure ...


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## hkskyline (Sep 13, 2002)

*As world struggles with recovery, luxury hotels are burgeoning in China 
Growing personal wealth, and desire to show it off, create draw for operators
*
19 May 2010
International Herald Tribune

High, high up, on the 118th floor of Hong Kong’s tallest building, a deep concrete pit awaits mutation into a swimming pool. Hard-hatted, dust-covered workers swarm about a site that will soon house six dining venues, a spa, a gym and 312 rooms with views of Hong Kong and the surrounding islands.

The opening of the Ritz-Carlton, which will be the world’s highest hotel — with an alfresco rooftop bar 490 meters, or 1,600 feet, above sea level — is still about six months away.

But already, the hotel has 20 bookings for wedding receptions and is getting six or seven more enquiries a day.

No wonder, really. As the global economy claws its way precariously back toward more normal growth, few places have regained their confidence — and the willingness to splurge on luxury goods and services — more quickly and firmly than China, including Hong Kong.

‘‘People book much further out here than in other parts of the world. With weddings, it’s partly to do with securing special locations on auspicious dates, but it’s also a sign of the confidence people have here,’’ Mark DeCocinis, Ritz-Carlton’s regional general manager, said in a recent interview at the construction site in the International Commerce Center. ‘‘The Asian hotel market has come back stronger and more quickly than other parts of the world — and China is leading the way.’’

New luxury hotels have been popping up all over the world. The Armani Hotel Dubai opened last month in the world’s tallest building, the Burj Khalifa. But the pace of growth has been strongest in Asia.

Asia’s hotel boom has not been as easy as just build it, and they will come. A race to open hotels in Beijing to coincide with the 2008 Olympic Games contributed to a slump in average room rates and many empty rooms once the Games were over.

In Shanghai, where the World Expo opened this month, about 20 upmarket hotels will open this year, according to Tophotelprojects.com, an online database. The sheer volume of new rooms has raised concerns of potential oversupply.

It is a risk many hotel executives are willing to take. For even though much of the country’s giant population struggles to make ends meet, China is rapidly becoming one of the world’s largest markets for high-end goods and services.

By 2012, according to a study published by McKinsey last year, China will have more than four million wealthy households — defined in China’s case as having an annual income of more than 250,000 renminbi, or about $37,000. Only the United States, Japan and Britain will have more wealthy households by then.

Consumer confidence across Asia was hit badly as the global economic crisis rippled around the globe. But confidence and spending began to recover toward the end of last year, and travelers took to the road again.

While business continues to languish elsewhere, here in Asia, hotel revenue has been rallying and is now not far below where it was just before the crisis hit, hotel executives say.

‘‘We’re not quite back to where we were two years ago — but we’re close,’’ Robert Murray, who heads the greater China business of the French hotel giant Accor, said during a recent visit to Hong Kong.

Room rates, deeply discounted by many hotel operators as the crisis struck, have been slow to come back up, executives acknowledge. ‘‘But in terms of occupancy rates, we are already back where we were,’’ said Mr. DeCocinis, of Ritz-Carlton.

Anticipating Asia’s rapid growth, the hotel industry has been racing to bulk up its presence in the region.

Ritz-Carlton, which had only one hotel in China four years ago, plans to have eight by the end of this year. In addition to the site currently being completed in Hong Kong, another Ritz-Carlton, with 285 rooms and a ballroom of 1,135 square meters, or 12,000 square feet, that seats more than 840 guests, is due to open in the skyscraper-studded Pudong area of Shanghai on June 21.

Across the Huangpu River, the luxurious Peace Hotel, which has been a Shanghai landmark for more than eight decades and is now operated by Fairmont Hotels & Resorts, is soon to open after a multiyear renovation. And Accor, whose brands include Mercure and Sofitel, plans to open up to 45 hotels in the Asia-Pacific region this year.

The openings illustrate just how promising luxury operators believe China to be. China’s rich people trust foreign brands, cherish service and like to display their wealth, including by dining out — all good from the point of view of hotel operators and luxury retailers.

‘‘China is our top priority globally now,’’ said Benjamin Vuchot, the Asia-Pacific chief of Van Cleef & Arpels, the French purveyor of exclusive jewelry, which is expanding aggressively in the region. ‘‘The world is seeing a fundamental shift in the balance in spending power towards Asia,’’ he added. ‘‘We’re getting ready for that.’’

Never mind that jewelry and top-notch timepieces like those sold by Van Cleef & Arpels are subject to a luxury tax of up to 30 percent in mainland China, or that hotels like the Ritz-Carlton or the Fairmont Peace Hotel will charge top dollar for a night.

Ritz-Carlton, which caters to the top 5 percent of business and leisure travelers, is confident that Chinese high spenders will come flocking.

It plans to open up to another 10 hotels and resorts in Asia in the next five years. Of those, five could well end up being in second-tier Chinese cities like Chengdu and Qingdao, Mr. DeCocinis said.


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## hkskyline (Sep 13, 2002)

*InterContinental to double Chinese hotels by 2015*
29 June 2010

LONDON, June 29 (Reuters) - InterContinental Hotels, the world's biggest hotelier, plans to more than double in size in China in the next five years, a move which will give a major boost to its performance.

The British group, which operates Holiday Inn and Crowne Plaza brands as well as InterContinental, currently runs 131 hotels in China with a further 146 in its pipeline, and will open 30 this year in the world's most populous nation.

"We are very optimistic about China for the rest of the year, and we are certain China will have a material impact on the group in the coming years," InterContinental Chief Executive Andrew Cosslett told Reuters in an interview on Tuesday.

The hotel market in China has improved since late 2009, reflecting a pick up in economic growth helping to boost the hotelier's $1 billion Chinese business and leading the global hotel industry out of recession into slow growth.

"We are doing better in 2010 than 2009 in most parts of the world but still not 2008. However, in China we are doing better than both years," Cosslett said at its London flagship Park Lane InterContinental Hotel.

The British group is the largest international hotelier in China after it first opened a Holiday Inn in Beijing in 1984. China is now the group's second largest market in terms of hotel rooms and revenue after the United States.

The Asia-Pacific region made around 10 percent of group profit in 2009, with the majority coming from China but this is expected to rise with its big expansion plans and the strong economic growth seen across China since late last year.

Chinese revenue per available room (RevPAR), a key industry measure, rose 27.1 percent in April compared with the group's overall 5.2 percent rise. Independent Smith Travel Research said Asia-Pacific industry RevPARs rose 25.2 percent in dollar terms during May, and analysts said the British hotelier usually outperforms the broader market.

Cosslett, 55, has been chief executive since February 2005 and has used the brand marketing expertise gained in his earlier career at Unilever and Cadbury to grow his global business to over 4,400 hotels and more than 650,00O rooms. He speeded up the move towards running franchised and managed hotels like its American rivals by selling off a number of owned properties in return for management contracts and returning the cash to shareholders.

Cosslett says the group is not wedded to keeping hold of its 16 remaining wholly-owned hotels and it would expect to sell thesm over time. The cash raised would be used to invest in the business, cut debt or returned to shareholders.

"When conditions improve we expect to move on these assets over time," said Cosslett, adding that they would only be sold when they could fetch a good market value, renovations had taken place and there was another InterContinental in the city.

The 16 hotels are valued at $1.8 billion with the majority of that coming from five InterContinental-branded hotels in London, New York, Paris, Hong Kong and Atlanta.

The Atlanta Buckhead hotel is set to be the first on the block for sale, industry sources with knowledge of the situation said, while a second InterContinental is set to open in New York next month and a second in London next year.

InterContinental shares have risen nearly 30 percent from end-2009 and posted a strong recovery from the low of 434 pence in March 2009.

They have gained along with U.S. rivals Sheraton-owner Starwood Hotels & Resorts and Marriott International on hopes the hotel market recovery will continue.

Its shares were off their lows and down 1.8 percent at 11.39 pounds by 1330 GMT in a London market off 2.2 percent.

The hotelier still earns some two-thirds of its profits from the United States so conditions there are critical to its prospects.

"There are still some question marks about the economy there but I am optimistic the business traveller is returning although the booking window is still short," Cosslett said.


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## alenshowbrizz (Jul 20, 2010)

Last year I went to china with my family for the family tour. I just to stayed in shanghai. It was awesome city, I really shocked to seen there night life , peoples are very friendly nature and they was enjoying with very huge life.


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## hkskyline (Sep 13, 2002)

*Langham takes on top end of Shanghai hotel market 
Xintiandi presence to be foundation for mainland expansion *
2 August 2010
South China Morning Post

Competition in Shanghai's high-end hospitality sector is heating up, with at least two international players entering the market shortly before the curtain falls on the World Expo at the end of October.

Langham Hotels International, owned by one of Hong Kong's largest property developers, Great Eagle Holdings, is to open the doors of The Langham in Xintiandi - a prime dining and entertainment precinct in Shanghai - on October 1.

The 380-room hotel will compete for custom with the 270-room Fairmont Peace Hotel, a 102-year-old hotel on the Bund that reopened last week after a three-year face-lift.

Langham Hotels International chief executive Brett Butcher said The Langham would be the group's anchor project on the mainland. It is its third hotel in Shanghai and will be followed by two new hotels in Beijing and two in Guangzhou.

"The Xintiandi hotel will be a strategic flagship, which will serve as a foundation for us to continue to expand into other primary and secondary cities," he said.

"It will become the first major hotel in Xintiandi."

He said discussions were under way to develop new hotels in Chengdu, Sichuan; Ningbo, Zhejiang; and Shenyang and Dalian in Liaoning.

Langham Hotels International recently paid US$73 million for the one-third of the Xintiandi hotel it bought from the Lo family, which controls Shui On Land, the developer of the Xintiandi district.

Butcher did not say how much The Langham would charge but said it would consider the Fairmont Peace Hotel as one of its competitors.

The Fairmont Peace Hotel charges at least 2,990 yuan (HK$3,428) per room per night, including service charge.

Some analysts said the two newcomers were entering a punishing sector, as the growth in supply of tourist beds in Shanghai had exceeded demand growth over recent years. The global financial crisis meant fewer corporate travellers visited the mainland last year.

Undaunted, Butcher said the number of hotel rooms in Shanghai, about 50,000, was about half of the total of 93,000 in New York.

He pointed out that mainland residents clocked up 1.3 billion trips within the country last year, a figure that had grown 10 per cent annually in the past few years.

Lily Ng, a Shanghai-based executive vice-president of hotel consultancy Jones Lang LaSalle Hotels, said the new supply of international hotel rooms in Shanghai would hit a peak this year, at 10,654 rooms, about double the 5,278 rooms last year.

Ng expects the total number of internationally branded hotel rooms to jump to 32,045 by the end of this year but growth in new supply to taper off to 3,647 rooms next year and to 3,161 rooms in 2012.

However, she believes Shanghai hotels will continue to recover from last year's doldrums.

"The May performance improved significantly from last year," she said. "This trend will continue until the end of the year."

In the first five months of this year, revenue per available room - the benchmark for the profitability of hotel rooms - of Shanghai's five-star hotels soared 53.4 per cent to 845 yuan, Jones Lang LaSalle said.

That was on the back of a 9.4 per cent rise in the average room rate to 1,340 yuan per night and an 18.2 percentage point increase in average occupancy to 63.1 per cent, it said.


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## hkskyline (Sep 13, 2002)

*Managing In Asia: Hotel boss taps the luxury market in China*
20 September 2010
The Wall Street Journal Asia

Steven Pan, Formosa International Hotels

It all started with a hotel bathroom, says Steven Pan, chairman of Taiwan-based Formosa International Hotels Corp., which paid $56 million in April to buy the international Regent luxury hotel chain.

"The Regent realized that the bathrooms, not the bedrooms, were where guests spent the majority of their time. So they expanded its size to almost one-third the size of the room," says Mr. Pan. This level of understanding customer needs is what's "going to make the next breakthrough in the hotel industry."

Regent -- acquired from Carlson Hospitality Group of the U.S. and Brussels-based Rezidor Hotel Group -- comprises seven hotels from Beijing to Berlin. Formosa previously operated just one hotel, the Grand Formosa Regent in Taipei.

Mr. Pan hopes the Regent deal will help Formosa in the key China market, "where the gross momentum of expansion will be in the short term." In the next five years, Mr. Pan says Formosa plans to build 30 to 40 more Regent hotels around the world -- half will be in China and the rest of Asia, a quarter in Europe and the Middle East, and the remaining quarter in the U.S. He sat down with Amy Ma in Hong Kong to talk about how he'll chart his course.

The following interview has been edited.

WSJ: Where in Asia is going to be Regent's first stop?

Mr. Pan: Hong Kong is our number one priority. But it is also the most difficult because there is very little space available. Besides Central, where else can we go? And land costs are some of the highest in the world.

WSJ: What about China? How hard is it to secure good real estate there?

Mr. Pan: You can be the best hotel in the world, but if you're on the wrong side of the street, you'll fail. There may be some pioneer resort locations in lesser-known cities in China, but most hotels are still going to go for the primary cities, like Beijing and Shanghai. It's fine though because these cities are large enough to support quite a few luxury hotels.

Getting the best location requires a combination of things, including a recognizable brand, good team and concept, and longstanding relationships with the real-estate developers.

WSJ: Hotel projects are notorious for taking a long time to pay back their investors. How do you increase your profitability?

Mr. Pan: Profitability for a luxury hotel has very little to do with the number of rooms -- we try to keep ours fewer than 200 rooms. A quarter of our cash comes from retail, which is one of our advantages because not every hotel operator has the brand strength to attract luxury retailers and run a high-end shopping mall. Hotel apartments sales are also performing extremely well, and we can charge a 30% to 50% premium to the rest of the residential market because of our brand.

WSJ: When the Regent came out in the 1970s with the four-fixture bathroom -- sink, shower, bath, and toilet -- competitors were quick to copy. How do you ensure competitors won't be doing the same thing this time around?

Mr. Pan: It's just like dating or applying for school. Competition is fierce. Right now we're focusing on making everything bespoke. That means we're incorporating the heritage and culture from the location into all aspects of the design and service in the hotels, aligning ourselves with local artists and intellectual communities. It's a case-by-case execution. So even if competitors try to emulate us, we're already onto the next bespoke idea.

WSJ: How do you get around the challenge of finding qualified local staff in cities in China where they may be less experienced?

Mr. Pan: We never hire for experience. We like to show them the Regent way rather than change them from their preconceived notions. We look for people from top hotel schools and college graduates that have studied abroad and aspire for a global lifestyle. Our management training style is very different in that we have a lateral structure and match up each trainee with a senior-level manager. Additionally, the initial team for any hotel opening will be handpicked from pre-existing regent staff -- a "dream team," maybe of the best chef from Beijing, the best general manager from Europe, and so on.


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## MoreOrLess (Feb 17, 2005)

hkskyline said:


> Hotels are not all government-owned. How can government funding be a key cause?


A bit late but yeah of course the hotels arent directly owned by the goverement, that doesnt mean there construction can't be backed partly by public money in some form whether its grants, low interest loans, tax breaks etc.

I'm not talking so much about your 5 star big brands which I'v never used but I'v stayed at a number of 3-4 star hotels in china where maintainance was clearly a problem, espeically outside Beijing/Shanghai.


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## Linguine (Aug 10, 2009)

OldKool said:


> in my small city we have 5 stars....12 4 stars and innumerable 3 stars.
> 
> and this one is the best of all..The TAj,Lucknow



Nice....


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## hkskyline (Sep 13, 2002)

*Accor to quadruple hotels *
Shanghai Daily
2012-2-29 

EUROPE'S largest hotel operator Accor SA aims to quadruple its portfolio in China over the next four years amid rising demand in the domestic travel market.

The Paris-based hospitality giant, which now operates 121 hotels across seven brands in 47 Chinese cities, including Hong Kong, Taiwan and Macau, plans to quadruple its China network by 2015, according to Sam Shih, chairman and chief operating officer of Accor China, yesterday.

Accor also inaugurated yesterday its newly-positioned Grand Mercure brand, which has aspects of Chinese culture and authentic European elements.


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## big-dog (Mar 11, 2007)

China to be hotbed of luxury hotels

Updated: 2012-03-17 09:20

By Yang Yijun in Shanghai and Wang Wen in Beijing (China Daily)



> Phoenix Island, in Sanya, is one of many large-scale developments providing luxury hotels and boutique apartments. [Photo/China Daily]
> 
> 
> The massive construction project in the coastal city is a prime example of what's happening throughout China, as international and domestic companies move quickly to build luxury hotels.
> ...


Contact the writers at [email protected] and [email protected]


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## italiano_pellicano (Feb 22, 2010)

China is amazing and have amazing hotels


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## hkskyline (Sep 13, 2002)

*InterContinental Starts Brand Targeting Chinese Travelers*
By Bloomberg News 
Mar 19, 2012 7:00 AM GMT+0800

InterContinental Hotels Group Plc (IHG), the world’s largest provider of hotel rooms, will begin opening locations as soon as next year under a new brand designed to appeal to Chinese travelers.

The Hualuxe brand of hotels will have teahouses instead of bars and feature other designs that target Chinese consumers, Chief Executive Officer Richard Solomons said in an interview. They’ll first open in China before expanding overseas targeting Chinese travelers, the company said. 

InterContinental in the past was “based on bringing western brands into China,” Solomons said in Beijing. “What we have done is to, first time ever, create a brand that really talks to Chinese hospitality.”

Growing wealth and the construction of highways, rail lines and airports is boosting demand for hotels as more Chinese travel. One in four of the hotels in InterContinental’s pipeline is in China, Solomons said. The company’s operating profit in China, Hong Kong, Taiwan and Macau increased 24 percent last year to $67 million, according to its website.

The company has already signed 20 letters of intent to build Hualuxe brand hotels across China. InterContinental will manage the hotels built by the property developers that are its partners, Solomons said. Hualuxe hotels may be opened in 100 cities across China in the next 15-20 years, he said.

InterContinental’s sales in Greater China accounted for about 12 percent of its total revenue last year, Solomons said. This year, Greater China’s share of total revenue will be “a bit higher” than 12 percent, he said.


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