The Trends of China’s Hotel Industry in 2009

Sandra L. Pouncy

2009 year is a year of both opportunities and challenges to China’s hotel industry. The financial crisis will further expand, it is a big challenge to China’s hotel industry, while the industry “shuffling period” has also brought development opportunities to countless China hotels. The development of the economy hotels and tourism hotels in 2009 will emerge a different situation.

Economy hotels: they are good hotels if they can remain in the financial crisis.

As the financial crisis continues to expand, the guests have reduced and the rates of hotel occupancy are lower, the economy hotels have also started to feel “cold”. Recently, seven days chain hotel, Rujia, Jinjiang star and other hotels have also launched a variety of disguised price cuts promotional strategies, and it is said to be the sharpest discount over the years.

However, the vice president of China Tourism Research Institute Dai Bin said that, at present the economy hotels account for 10% to 20% in the total hotels proportion, which is far below the United States and European countries, an average of 60% to 70%. For the long run, the business volume of economy affect smaller than star hotels in China, due to the price advantages, and instead China economy hotels will face a new round of development opportunities. The economy hotels should seek a breakthrough in innovative service and open market segments.

China Market Research Group expects that the revenues of China’s economy hotels will increase by 12% to 15%.

In 2009, the competition between economy hotels is still the competition of brand, service, operate capacity and cost control. The hotels remained are good hotels in economy hotels.

Tourism hotels: the outlook is still broad

From the view of the entire economy, tourism has a bright future, and it is predicted that in 2010 China will replace Spain to the second place, surpass France and move up to the first place in 2020. The United Nations World Tourism Organization predicts that by 2015 China will become the No.1 tourist receiving country, and the fourth largest tourist source country in the world. The domestic travelers will reach 2.8 billion people, outbound tourism will reach
100 million people, and the total tourism market will reach 30 million people. The tourism industry associated with 109 industries and 39 sectors of our national economy, the development of related industries will promote tourism industry in different degrees. The tourism industry is an important part of stimulating domestic demands.

What’s the most important is that the development of China tourism is bound to drive the development of China’s hotels.

China property hotels.

More than 500 property hotels in China will establish a “Asia-Pacific co-management association”, to resist the impact caused by global economic recession.

The property hotels are a special kind of hotel operation model, that is make the hotel room as a unit, the developer will divide the separate rooms into a individual property and then sell to the investors, investors then entrust a hotel management company to rent all the rooms to people, in this way the investors can obtain annual profit. In recent years, this kind of hotels have developed rapidly in China, at present, the total of this hotels in China reach more than 700 hotels.

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