Buy Your own advertising
.Download Adobe Acrobat Reader to open [PDF] files.
Global Hotel Operators Prepare for China Slump
2009. 29 April
Shanghai World Expo. But China’s hotel industry blues aren’t confined to a couple of hotel towers in Shanghai.
The story points to a troubling trend in China’s high-end hotel market, which is dominated by foreign brands. The past several years have seen the rapid expansion of major hotel chains across China, spurred in part by splashy events such as last summer’s Olympics and next year’s Expo.
But now, as a result of the global financial crisis, luxury hotels have seen their occupancy rates and room rates fall. Even before fears of swine flu started to put a damper on international travel, the figures looked grim. In the first quarter of the year, occupancy at five-star hotels in Shanghai was down to 42% in March, while revenue per five-star room has been halved since 2005, according to Jones Lang LaSalle Hotels.
Hotel operators have started to take heed. At last week’s China Hotel Investment Summit in Shanghai, representatives of several large hotel groups, including Marriot, Intercontinental and Pan-Pacific, said they are suspending or canceling expansion plans in China, according to China Business News (in Chinese here).
Marriott, for example, said it will delay three hotel projects, while another six are still under discussion. Intercontinental and Pan-Pacific each plan to proceed with 60% of their projects, while delaying 30% and canceling 10%, the report said.
Sky CanavesSource: blogs.wsj.com