Retailing, Franchising, and Consumerism Business Intelligence in China

CNTA Releases China Hospitality Industry Development Report

The China National Tourism Administration, the regulator and promoter of China's tourism industry, has recently released a report regarding the current development status, trends and challenges faced by the Chinese hospitality industry.

CNTA says that China's star-grade hotel scale is increasing fast. At the end of 2006, China had a total of 13378 star-grade hotels, which was an increase of 11.26% compared with the same period of the previous year. Of those, 298 were five-star hotels, 1400 were four-star hotels, 4993 were three-star hotels, 6027 were two-star hotels and 660 were one-star hotels.

Guangdong and Zhejiang ranked first and second with the most star-grade hotels of 1275 and 1089, respectively, and they were followed by Jiangsu, Yunnan, and Beijing. Most of the high star grade hotels, accounting for 61.56% of the total star grade hotels, were located in the eastern part of the nation. There was no five-star hotel in Qinghai, Ningxia and Tibet, all of which are in China's western regions.

Economy and budget hotels have become a hot area for development. Shanghai, Beijing and Jiangsu were the top three in terms of budget hotel numbers. In addition, China's domestic budget hotel brands Motel 168, Home Inn and Jinjiang Inn were rapidly developing, and foreign budget hotel brands like GreenTree Inn and Super 8 were also expanding fast in China.

CNTA says that the construction of luxury hotels in China will soon peak. According to the reports incomplete statistics, there are about 1107 high star hotels under construction or to be constructed in China and they are mainly located in Guangdong, Zhejiang, Beijing, Shanghai, and Anhui.

International hotel management groups have sped up their expansion in China. By the end of last year, 37 international hotel management companies had entered Chinese market with 60 brands of 502 hotels. The top five that have opened the most hotels in China are Wyndham with 159, InterContinental with 69, Accor with 43, Starwood with 37 and Marriot with 31. They will quickly increase their presence in China in the next few years.

With the increase of high star hotels and the entry of international hotel groups, the competition in China's hospitality industry has become even fiercer. In order to meet the challenges, domestic hotels need to improve their management level and brand construction and those non-star hotels need to be further regulated. Most importantly, they need trained personnel, as the quality of hotel staff in China has eroded over the years as demand has outstripped supply.

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