Room for more
Despite a population of 1.3 billion, China is only third largest in the world for the number of hotel rooms it has, with 1.6 million rooms, after the United States – 4.6 million rooms and population of 311.9 million – and Japan – 1.7 million rooms and population of 128 million – according to a report.
And, with the continued growth in its economy and tourism markets, the mainland is the obvious target for expansion among international hotel chains.
Shangri-La, Hilton Worldwide International, and the InterContinental Hotels Group (IHG) are three key players who, after a long presence in the nation, have never slowed the pace of expansion, despite suggestions there could be an oversupply in some key cities. “We feel very optimistic about prospects in China in general, the business pick up is very strong and shows healthy signs of growth in all regions,” says Kent Zhu, group director of sales and marketing, Shangri-La Hotels & Resorts.
The growth has been boosted by improving transport infrastructure, such as high-speed rail networks and interconnected highway networks linking major airports with cities, and the boom in domestic travel due to the availability of cheaper domestic flights through online travel agencies such as E-Long.
The increase in domestic consumption, especially in inland areas, has also presented growth potential for hotels.
“We are witnessing more companies expanding their presence inland and will be expanding our footprint beyond the eastern seaboard to secondary cities,” says Martin Rinck, president for the Asia-Pacific at Hilton Worldwide.
It is in these secondary cities where there is likely to be an increased premium on quality accommodation. According to Zhu, sustainability, efficient hotel design, construction quality and staff are important considerations in hotel development in China in the next few years. And it’s not just larger venues that are in increasing demand, smaller boutique meeting spaces are becoming just as popular. IHG has found that in addition to the major conference venues in its well-known hotel brands, including Crowne Plaza, boutique meeting spaces in the smaller Hotel Indigo are also taking off.
But there are also challenges. For IHG, one key obstacle is getting qualified staff to support its growth. But the issue is being mitigated as international hotels are developing universal training and learning courses.
“The challenge comes in developing the right people for the right roles and here, companies offering solid training and development opportunities will have an edge,” says Rinck, whose company, like IHG and Shangri-La, offers such courses to target different skills over employees’ careers.