High-end hotels going strong in China - Shaun Rein
Shaun ReinWealthy Chinese and international travelers make the hotel industry a bright spot in China, says Shaun Rein, managing director of the China Market Research Group in the Wall Street Journal, as major hotel chains announced to expand their investments despite the ongoing financial crisis.
Mr. Rein said he expects strong travel demand from Chinese consumers between the ages of 26 and 32 years old, who in research his company has done say they plan to travel domestically at least once in the next six months and make one international trip in the next year. Thailand, South Korea and Hong Kong are their top destinations."We still see every day Chinese taking vacations and spending their money," he says. "They don't see any fear from the global slowdown."The arguments is going to be loud. Some industries like IT-companies with major foreign investments are tightening the belt, also in China. But other see China defy the global crisis by banking on its strong domestic demand. It is going to be an interesting debates as different scenario's get into shape.
Commercial
Is the financial crisis going to hit China hard, or will strong domestic demand and financial isolation shield the country from the international fallout? The debate is getting into shape, also among the speakers at the China Speakers Bureau. Interested in having them as a speaker? Do let us know.
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3 Comments:
Aren't these comments very different from what was said a couple months ago where he said there were too many hotels and not good prospects??
That was indeed the argument during the Beijing Olympics. It looks like the long-term perspectives are still ok for these hotels. What does not imply that they are right, of course.
No, this is not different at all but thank you for the comment. A few months ago I discussed too many hotels built specifically for the Beijing Olympics that were not sustainable because, especially at the 4 and 5 star domestic hotel level, they had not created enough brand value and differentiation and built in locations not central to Beijing (i.e. too far away because of traffic).
I argued then that many would be hit hard in the short-term too until business travel picked up post-Olympics and the security issues/ regulations were eased.
In this piece, WSJ is referring to the hotel sector all over China and not just Beijing... especially the high-end foreign hotels like a Shangri-La, Westin, JW Marriott or Hyatt because they have created a reason to stay there from loyalty programs to service to location to comfort.
In Beijing, we still maintain that there is an over-supply of poorly construed 4-star domestic hotels but believe that certain segments (like 5-star foreign hotels) will continue to do well. So there is not a contradiction between our statements whatsoever.
S. Rein
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