China has a massive hotel expansion going on but it still needs more qualified budget hotels. Since 2000, more than 35 hotels have opened in Shanghai alone. The expansion into China, which has about 12,000 hotels, is part of a push by the major hotel companies to take advantage of comparative rising affluence and increased travel. Comparative, because in the United States the middle-class is bigger by an order of magnitude.

Nevertheless, according to the World Travel & Tourism Council, based in London, China’s gross domestic product expanded 10.4% in the fourth quarter, making the country the world’s fastest-growing major economy. China already ranks among the top five countries in spending for business travel.

Stephen Holmes, chief executive of Wyndham who appears in the illustration above, said, ‘You have a rapidly growing economy, an expanding middle class and investment in infrastructure that makes those markets a great opportunity.’

• Industrywide, 481 hotels are under construction or planned for China; up from 316 and 161 last September according to the research company, Lodging Econometrics.
• Wyndham, based in Parsippany, New Jersey, operates or franchises 84 hotels under brands like Days Inn, Super 8 and Howard Johnson. It expects to double the number of Super 8s to almost 90 in the next year.
• Marriott’s chains, including Ritz-Carlton and Renaissance, have 39 hotels in China with more planned.
• Hilton Hotels plans to open 25 Hilton Garden Inns, a lower-priced brand.
• InterContinental Hotels Group expects to about double its Holiday Inns in China, to 125, in the next 22 months.

In China, much of the development involves large luxury hotels in urban centers, with 68% of all new projects four- or five-star hotels. An exception is Wyndham’s economy Super 8 chain, which is benefiting from the Chinese belief that eight is a lucky number. This concentration by the others on the top end may turn out to be a somewhat unbalanced development. There is plenty of room in the medium and lower levels.
Source: International Herald Tribune