Luxury hotels target Chinese customers

The beginning of the recovery for China's hotel market began in 2010 and in 2011 demand increased further for rooms.

Hotel executives still believe that China is a safe haven for luxury hotels, despite the occupancy rate for 2011 hovering at around 60 per cent.

"We haven't felt the crisis that they are experiencing in the US and Europe," said Charlie Dang, general manager of Northern China for Starwood Hotels & Resorts Worldwide Inc, owner of nine hotel chains including the St. Regis, Sheraton, Westin and W brands.

"The domestic economy is still very strong. Generally the second- and third-tier cities are growing rapidly and that helps our business."

The American company opened 40 hotels on the mainland in the last five years.

It currently has 92 hotels in operation and another 90 in the pipeline.

The Crowne Plaza Hotel, owned by InterContinental Hotels Group Plc, in the third-tier city of Dandong in Northeast China's Liaoning province, reported an occupancy rate of 80 per cent during the summer season and 60 per cent during the winter.

"These are very good results for us," said the hotel's public relations manager, Ren Shixuan.

Crowne Plaza is still the only international luxury hotel in the port city.

It sits in a new development area overlooking the Yalu River that marks the border between China and the Democratic People's Republic of Korea.

InterContinental believed when the hotel was built in time for the Beijing Olympics, that there was scope to accommodate businessmen from the two countries. There was also potential to expand beyond first- and second-tier cities.

"Our business grew 15-20 per cent last year. This year, we're expecting something like 10-15 per cent growth, so we're pretty optimistic about the future," Ren said.

"Our current clientele is 60 per cent tourists, here primarily for leisure. We're really surprised by this figure. It's really good for the hotel, because it means that we don't have to rely so heavily on business travelers and won't be hugely affected by any economic downturn," she said.

Hotel operators also continued to strengthen their foothold in China in 2011 despite the competitive market. InterContinental, the largest international hotel company in Greater China has 162 hotels in operation and 143 under development.

Demand has mainly stemmed from the increasingly wealthy domestic market.

China had 960,000 individuals with a personal wealth of 10 million yuan (S$1.9 million) or more in 2010, up by 85,000 individuals or 9.7 per cent year-on-year, according to the Hurun Report, China's version of the Forbes rich list.

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Source : Asiaone, By Tania Lee, China Daily