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Hotels in China and the Special Administrative Regions - International - August 2012

This report provides an overview of recent developments in the Greater China hotel sector (including Hong Kong and Macao). Following a review of the outlook for spending on travel and tourism in China, the country’s hotel capacity and performance are evaluated, as well as the major urban hotel markets. The main body of the report is devoted to profiles of the leading hotel operators and the final section offers some perspective on what to expect for the hotel sector in China over the coming years.

Some key findings from the report include:

  • The number of domestic travellers is forecasted to increase by over 25% from the current level to reach 3.3 billion by 2015 and the Chinese hotel market is projected to grow by 5-8% annually through 2030. Chinese chains will increasingly target outbound travellers from China, with the number of trips projected to about double, rising to 100 million over the next ten to 15 years.
  • Given the exceptional growth expected in the number of Chinese hotel guests, both the international chains and Chinese groups have been busy adapting their lodging products or creating new brands to target this market.
  • Some major Chinese property developers, which have partnered with the big international chains, have now started to create their own brands and have major development projects on the drawing board.
  • The leading hotel chains in terms of room capacity and the most rapidly expanding ones have been Chinese budget operators, including Home Inns, 7 Days Inns and Hanting Inns and Hotels, which are all also quoted on the US NASDAQ Stock Exchange. However, it is likely that their rate of growth will slow in the future as the segment reaches saturation point. Evidence pointing in this direction is the increasing horizontal integration in the sector, best exemplified by Home Inn’s purchase of Motel 168 in September 2011.
  • China’s major budget hotel operators have adopted an ‘asset-light’ structure of expansion via franchises and management contracts, and are de-emphasising leaseholds, the formerly favoured practice. Jin Jiang, the leading Chinese multi-brand hotel operator, has adopted a similar approach.
  • Several of the major international chains, such as InterContinental Hotels Group (IHG), Accor, Starwood, Carlson Rezidor and Marriott, are set to at least double their capacity in China over the next three to five years.

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Table of contents

  1. Introduction

      • Key findings
      • Data Sources

        • Overview

          • Outlook for spending on travel and tourism
            • Figure 1: Outlook for growth in spending on travel and tourism in China by type of expenditure, 2012 and 2022
          • China’s accommodation capacity
            • Figure 2: Capacity in Chinese hotels and similar establishments, 2006-10
            • Figure 3: STR Global’s census and samples* of Chinese hotels, April 2012
          • A shift towards economy hotels
            • Figure 4: Hotels by grade in China*, 2003-10
            • Figure 5: Economy hotel market share, by operator, 2011
          • Hotel ownership profile
            • Hotel performance data
              • Figure 6: Hotel performance in North-Eastern Asia and Greater China, YTD April 2012 vs YTD April 2011
            • Client segments
              • Figure 7: Client segments* in Chinese hotels, 2010-11
            • China’s urban hierarchy
              • Figure 8: China’s 54 leading cities, by category, 2012
              • Figure 9: Internationally branded upper upscale and luxury capacity* in Shanghai, 2012
              • Figure 10: Internationally branded upper upscale and luxury capacity* in Beijing, 2012
              • Figure 11: Internationally branded upper upscale and luxury capacity in Hong Kong, 2012
          • The Leading Hotel Groups in China

              • Figure 12: Hotel groups with at least 10 properties operating in China, 2012
            • BTG-Jianguo Hotels & Resorts (Home Inns)
              • Figure 13: Growth in Home Inns’ hotel portfolio, 2003-12
            • Heavy concentration in Beijing–Shanghai corridor
              • Expansion into secondary and tertiary cities
                • Figure 14: Home Inns’ hotel portfolio by province, brand and asset management structure, 31 December 2011
              • Three brands
                • Home Inns is going ‘asset-light’
                  • Figure 15: Home Inns’ pipeline, by province, brand and asset management structure, 31 December 2011
                • The Motel 168 acquisition
                  • Pricing and distribution
                    • Figure 16: Home Inns’ booking channels in 2011
                  • Frequent-guest scheme
                    • Jin Jiang Hotels
                      • Still majority government-owned
                        • Figure 17: Jin Jiang’s 3- to 5-star portfolio, 2012
                      • Development pipeline
                        • New loyalty programme
                          • 7 Days Inn
                            • Management contracts favoured over leaseholds for current growth
                              • Figure 18: Key capacity and performance data for 7 Days Inn at year-end 2007-11
                              • Figure 19: Days Inn hotels, by location, type of holding structure and stage of development, 31 December 2011
                            • Frequent-guest scheme
                              • GreenTree Inns
                                • Four sub-brands
                                  • Frequent-guest scheme
                                    • Hanting Inns & Hotels (China Lodging Group)
                                      • Figure 20: Growth in Hanting Inns & Hotels’ portfolio, by asset-management structure, 2005-11
                                    • Three limited-service brands
                                      • Hanting Express Hotel
                                        • Hanting Seasons Hotels
                                          • Hanting Hi Inn
                                            • Hotel development standards
                                              • Franchised and managed hotels
                                                • Frequent-guest scheme
                                                  • Online and mobile channels
                                                    • InterContinental Hotels Group (IHG)
                                                      • Figure 21: IHG’s hotel and room count in Greater China, at 31 March 2012
                                                    • Capacity set to double
                                                      • Figure 22: IHG’s hotel and room count in the pipeline in Greater China, at 31 March 2012
                                                    • Starwood Hotels & Resorts
                                                      • Sheraton leading the charge
                                                        • Westin, Le Méridien, St Regis and the Luxury Collection too
                                                          • Staff sourcing streamlined
                                                            • Wyndham Hotel Group
                                                              • Four new Ramadas and one more Wyndham recently signed
                                                                • Best Western International
                                                                  • Accor
                                                                    • A full pipeline
                                                                      • Recent additions
                                                                        • Jinling Hotels & Resorts
                                                                          • Stepping up pace of expansion
                                                                            • Figure 23: Jinling’s active pipeline, 2012
                                                                          • Marriott International
                                                                            • Shangri-La Hotels and Resorts
                                                                              • Figure 24: Shangri-La’s Greater China hotel portfolio, 2012
                                                                            • Serviced apartments
                                                                              • Figure 25: Shangri-La serviced-apartment locations in mainland China, 2012
                                                                            • Frequent-guest scheme
                                                                              • HNA Hotels & Resorts
                                                                                • Zhejiang Narada Hospitality
                                                                                  • Guangzhou Lingnan International Enterprise Group
                                                                                    • Guangdong (International) Hotel Management Holdings
                                                                                      • HK CTS Hotels
                                                                                        • Frequent-flyer tie-in
                                                                                          • Hyatt Hotels Corporation
                                                                                            • Hilton Worldwide
                                                                                              • New Century Hotels & Resorts
                                                                                                • OCT International Hotel Management
                                                                                                  • Franchises, management contracts and leases
                                                                                                    • Tianlun International Hotels
                                                                                                      • Kempinski Hotels
                                                                                                        • Two in pipeline
                                                                                                          • Carlson Rezidor Hotel Group
                                                                                                            • 18 hotels in pipeline
                                                                                                              • Plus three more …
                                                                                                              • Hotels in the Special Administrative Regions

                                                                                                                • Hong Kong
                                                                                                                  • Figure 26: Number of hotels/tourist guesthouses and rooms in Hong Kong, 2007-16
                                                                                                                • US Dollar peg boosts attraction
                                                                                                                  • Mainland Chinese are main client base
                                                                                                                    • Figure 27: Total spending by incoming tourists on hotels, 2010 and 2011
                                                                                                                  • Hotels currently thriving
                                                                                                                    • Figure 28: Hong Kong hotel performance 2011 and January-April 2012
                                                                                                                  • Macao
                                                                                                                    • An explosion of capacity
                                                                                                                      • Casinos playing their part
                                                                                                                        • Occupancy at record high
                                                                                                                          • Hotel capacity has gone upscale
                                                                                                                            • Figure 29: Macao’s lodging capacity, by category, 2000-10
                                                                                                                          • Wynn to expand
                                                                                                                            • More emphasis on high-end market
                                                                                                                              • Figure 30: Casino games available at Wynn Macau operations, 2010 vs 31 December 2011
                                                                                                                            • Hotels accessories to gaming operation
                                                                                                                              • Figure 31: Wynn Macau’s revenue breakdown, 2010-11
                                                                                                                            • Ritz-Carlton and JW Marriott hotels in pipeline
                                                                                                                            • What Next?

                                                                                                                                • Budget sector reaching saturation
                                                                                                                                  • Chinese brands to the fore
                                                                                                                                    • HUALUXE, IHG’s Chinese brand
                                                                                                                                      • Accor tailors Mercure for Chinese market
                                                                                                                                        • Hilton possibly too … in longer run
                                                                                                                                          • Chinese groups also getting in on act
                                                                                                                                            • Shimao
                                                                                                                                              • Greenland
                                                                                                                                                • Dalian Wanda
                                                                                                                                                  • Wanda Hotel Investment & Development Company
                                                                                                                                                    • Wanda heads up resort development consortium

                                                                                                                                                    Companies Covered

                                                                                                                                                    To learn more about the companies covered in this report please contact us.

                                                                                                                                                    Hotels in China and the Special Administrative Regions - International - August 2012

                                                                                                                                                    £295.00 (Excl.Tax)