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China Hotel Market Report, 2006-2007

Published: Dec/2006

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After twenty years of rapid growth in economy, China has now become one of the world most attractive destination for tourists, which means great opportunities for the development of hotels. China, along with its entry into WTO, will further open its tourism market; meanwhile, the negative affections from excessive expansion happened in the 90’s last century has been gradually digested by the market and the hotel industry is getting recovered. A new investment peak in hotel industry appeared in 2004-2005 period: international hotel groups surged into Chinese market on a large scale while domestic hotels reacted harshly.

China had 120.29 million inbound travelers in 2005, increasing by 10.3% than 2004. Over 46.81 million of the inbound travelers stayed overnight, increasing by 12.1%. With further execution of reform and open policy, the national economy will continue to develop rapidly and the people's living standard will also improve constantly; China is pacing up towards internationalization, for example the Beijing Olympic Games, Shanghai World Expo and Guangzhou Asian Sports Meeting are to be held soon, all of those factors are creating a good environment for hotel industry development in China.

 

Generally speaking, hotel industry shows a strong momentum in China. IBFCMF of all five-star hotels in China increased by 42%; as for four- and three-star hotels, the increase rate was 52% and 24% separately. Particularly, IBFCMF for foreign funded five- and four-star hotels realized better increase rate, which shared 43% and 35% of their total revenue respectively. Five-star hotels in Shanghai set the highest record with IBFCMF sharing 48% of the total revenue, followed by Sanya(47%) and Beijing (40%). In addition, guest room sector earned the most for five-star hotels, accounting for 55% of the total revenue while only taking 11% of the total expenditure. In contrast, 35% of the revenue came from catering sector, but shared 22% of the total expenditure.



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