China’s hotel market moves towards “made for China”

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THE INTERCONTINENTAL HOTEL Group (IHG) has announced further plans for its new hotel brand, Hualuxe, geared towards Chinese preferences and values. This is an example of a shift within the Chinese hotel market and the role of international chains.

According to A. T. Kearney, China has just four hotel rooms for every 1,000 people, compared to 10 in the UK, and 20 in the US. They also predict that by 2025, China’s hospitality industry will be worth US$100bn, and reach 6.3 million hotel rooms, reaching 8 rooms per 1,000 people, an increase of 50%.

A 2014 survey conducted by the China Tourism Hotel Association (CTHA) states that 46.1% of hotels in China today opened after 2006. The same survey of 269 hotels, however, also states that the largest operational challenge to hotels in China is under-demand, with 67.7% of hotel managers agreeing. It is necessary to note however, that 85.8% of hotel managers were either optimistic (21.9%) or very optimistic (53.9%) about the three-year market outlook for Chinese hotels.

Such optimism is reflected in three recent announcements made by IHG, Carlson Rezidor, and Wyndham in the tourism and MICE industries, and points to greater opportunities to come within the two sectors for hotel companies.

IHG’s first Hualuxe hotels will come on stream in Nanchang, the capital of Jiangxi province in Southeast China, and Yangjiang, in Guangdong province. Whilst it is nothing new for international hotel chains to build hotels which aim to meet the demands of customers, IHG appears to be the first non-Chinese hotel chain to establish a brand designed exclusively to meet the demands of Chinese customers, inspired by the likes of the Shangri-La brand of hotels. IHG has plans for Hualuxe to have a presence in 100 Chinese cities by 2030, and to expand to other international destinations such as London and New York.

Another company that is expanding its presence in China is the Carlson Rezidor Hotel Group, which plans to triple its presence in China by 2019. Carlson Rezidor has announced that it will bring its Radisson Red brand to China, with the first hotel in Shenyang, Hunan province, opening in 2016. Radisson Red, targeted at technology, design and art-minded travellers, will join Radisson Blu, and Park Plaza, both of which already operate in China. Carlson Rezidor also announced that The Quorvus Collection, its luxury hotel brand, will also be introduced in China.

Early May also saw the opening of Wyndam Hotel Group’s first hotel focused on the meetings, incentives, conferences and exhibitions (MICE) sector in China. The new hotel in Chongqing is located within the Chongqing International Expo Centre, the largest expo centre in western China, and the second largest expo centre in the country.

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