Hotel demand in China growing

9 Oct 2012

A report by the real estate agent Knight Frank forecasts that demand for hotel accommodation in China will continue to grow rapidly over the next few years and international hotel groups will respond by expanding their presence in the country.

The Greater China Hotel Report 2012 states that China’s robust economic development and growing visitors numbers are creating a surging demand for hotel rooms. According to it, the total number of international overnight visitors across China climbed to 56.7 million, up 1.9 per cent from the previous year.

It reports that China’s tourism receipts, the amount spent by people travelling within the country, increased 23.6 per cent from a year earlier. The amount spent by domestic travellers grew 53.5 per cent, whilst that spend by foreign travellers in 2011 grew by 5.8 per cent.

“Encouraged by China’s strong economic performance and the rapid development of second and third-tier cities, international hotel operators have shown strong confidence in China’s market and are pursuing aggressive expansion plans,” the report observes.

This trend is evident in hotel expansion plans. Accor’s Pullman brand, for example, is planning to open 25 hotels in the country within the next three years (see here) and Starwood Hotels & Resorts, which already has 40 hotels in China, has another 90 in the pipeline (see here). Meanwhile, the report states that IHG, which has 162 hotels in China, plans to open another 143 (read more about IHG's plans in China here).

The report forecasts that Shanghai will see a particularly large demand for accommodation, fuelled by the completion of tourism projects such as Shanghai Disneyland and its growing role as a hub for high-speed rail.

In Beijing, the report predicts that demand for hotel rooms will rise steadily, benefitting from government plans to develop the tourism industry. It forecasts that the number of business travellers to Beijing will continue to rise as the country plays an increasingly active role in the global economy.

It predicts that demand for hotel rooms in Hong Kong will also grow steadily, driven by the completion of a new cruise terminal, along with the planned expansion of the Ocean Park and Disneyland theme parks.

In Guangzhou it states that the bi-annual Canton Fair and the rise in multinational companies establishing offices in the city will keep demand for accommodation strong (read more about Guangzhou's hotel market here).

To read the full Knight Frank Greater China Hotel Report 2012, click here

Nicholas Olczak 

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