The number 8 may be lucky to Chinese in general, but hotel entrepreneurs in particular are pretty happy with 60 at the moment. Occupancy rates for China’s luxury hotels hovered around 60 percent in 2011, and many are saying this is welcome news.
“We haven’t felt the crisis that they are experiencing in the US and Europe,” said Charlie Dang, general manager of Northern China for Starwood Hotels & Resorts Worldwide Inc., owner of nine hotel chains including the St. Regis, Sheraton, Westin and W brands.
The Crowne Plaza Hotel, owned by InterContinental Hotels Group Plc, in the third-tier city of Dandong in Northeast China’s Liaoning province, reported an occupancy rate of 80 percent during the summer season and 60 percent during the winter. “These are very good results for us,” said the hotel’s public relations manager, Ren Shixuan. “Our current clientele is 60 percent tourists, here primarily for leisure. We’re really surprised by this figure. It’s really good for the hotel, because it means that we don’t have to rely so heavily on business travelers and won’t be hugely affected by any economic downturn,” she said.
Dang said his hotels do not rely so much on international business anymore, but rather more on the domestic market, which makes up 60 percent of the company’s business across 22 hotels in Northern China. “Chinese customers used to be like 15-18 percent. Now it is 60 percent Chinese, so that’s where you see the power of Chinese customers growing,” said Dang.
Beijing is where most millionaires live according to the Hurun Report, released in April. In 2010, 17.7 percent of China’s luxury customers or 170,000 millionaires lived in Beijing, compared to 157,000 in Guangdong province (16.4 percent) and 132,000 in Shanghai (13.8 percent).
Luxury hotels in the country are becoming a tool to develop brand recognition and loyalty among Chinese travelers for when they travel overseas. China soared toward new tourism records with more than 50 million outbound travelers in the first nine months of 2011, according to the China Tourism Academy.
“The long-term prospects are good for luxury and other hotels,” said Konstanze Auernheimer, director of marketing and analysis at STR Global, a consulting and research group that has tracked hotel occupancy levels in China.
InterContinental, the largest international hotel company in Greater China has 162 hotels and plans to open an additional 143. Meanwhile, Starwood Hotels & Resorts Worldwide Inc. operated 92 hotels and has another 90 in the pipeline.
photo credit: four seasons shanghai