Major companies such as Marriott International, the Intercontinental Group, Accor of France and Shangri-La of Hong Kong have built networks and are expanding aggressively through the country.

According to the World Travel & Tourism Council the China market — now the sixth largest — is expected to become the world’s second biggest in ten years.

Joe McInerney, president of the American Hotel & Lodging Association, said, ‘It’s irresistible. It is a tremendous market for hotels. And the opportunities are enormous.’

Bruce McKenzie, regional VP for Greater China at Intercontinental, the oldest Western hotel operator in China, said, ‘There’s no doubt that it is an absolutely key market and we have a comprehensive growth strategy.’

IHG, which has been in China for 23 years, currently has 67 properties there. It plans too open 125 more by the end of 2008. The company’s workforce will almost double to 43,000 over the next three years.
Accor already operates 50 hotels there under its Sofitel, Novotel and Ibis brands, has announced plans to open or start developing more than 180 hotels by 2010 most of which will be under the Ibis, one star, brand.
Shangri-La, Asia’s biggest listed hotel chain, plans to raise at least $662 million to add to its 19 hotels in China.
Marriott International, which opened its first hotel in China in 1989, plans to go from 25 to 48 properties between now and 2010 and to 100 within the next five to six years.
Wyndham Worldwide by the end of this year will have 20 Ramada Inns, 13 Howard Johnsons, 11 Days Inns, 50 Super 8s.
Best Western will double its stable of hotels to 28 by end of this year.

Source: CNBBC

Best Western International has its sights on becoming the largest hotel chain in Asia within three years. Over the next six months, Best Western will sign 17 new hotel contracts some of which will be in China and aims to have more than 200 properties by 2010.

The chain’s Asia presence has expanded from just six hotels in 2001 to 106 today.

David Kong, Best Western president and CEO, seen here, said, ‘As the world’s largest hotel chain, we bring scale, reach and a billion-dollar reservations system to our international partners.’

It is unusual to hear the chief executive of a major chain explain the basic great attraction of management contracts. It is not the ability to run a hotel — although that is, of course, part of it. It is the reservations system that makes the difference. A standalone hotel which is not tied into a major reservations system is probably missing about 40%, possibly more, of the potential market.

Most chains empasize the quality of their offering, the treatment of every customer like a VIP and so on. But the basic attraction is the reservation system which means a hotel, run at a professional standard, can be guaranteed a steady supply of paying customers booking through the system.

David Kong then went on to say the brand’s global sales and marketing initiatives, quality assurance programs, and Gold Crown Club International loyalty program make it popular with Asian developers and hoteliers. Which is true and correct. But it is the reservations system which is the essential component.

In five years, Best Western will have 50 hotels in China including two which should open in Beijing before the 2008 Summer Olympics.
Source: Earth Times

Standard & Poor’s Equity Research has identified the international hotel groups that it expects will take home from the China Olympics the gold medals for the amount of guests who stay and, as an extension the profits that will be made. With less than 500 days to go the excitement is beginning to mount.

Start with a base figure which is that Beijing is expected to receive about 500,000 to 550,000 overseas visitors as it hosts the summer Olympics.

S&P’s Pearl Wang, writing in US Business Week, says China has the largest development pipeline for hotels in the world after the United States. Lodging Econometrics states that China’s room count is 63% of all the rooms in the Asian pipeline.

Pearl Wang notes:

‘Today in China there are about 5,000 hotels with star ratings, holding about 701,700 available rooms. In comparison, the U.S. has about 50,000 hotels. This suggests to S&P that the market in China appears to have a lot of room for growth. How much? It’s hard to say. By way of comparison, the U.S. hotel industry has annual revenues of about $90 billion.’

So who are the ones to follow? S&P believes one good investment opportunity lies with InterContinental.

S&P equity analyst William Mack said ‘InterContinental is among the three largest hotel companies in China. The company is expanding its China brand presence — in terms of number of rooms — by about 20% a year,’ The company has more than 55 hotels in China, most of which are managed or franchised. InterContinental plans to have about 125 hotels by 2008; many will be Holiday Inns.

Other winners identified by S&P are Hilton Hotels, Marriott International, and Starwood Hotels & Resorts. Other U.S industry players making strides in China are Best Western, which will have around 25 hotels by the end of this year, and Wyndham.
Source: Travel Mole

Best Western International has signed agreements with developers to increase the number of its hotels in China to 29 from the 17. The group did not provide a timetable for putting the 12 new hotels into operation.

Best Western is somewhat unusual in hotel chains. Easier to think of it as a co-operative then as a normal chain. In the co-operative there are nearly 4,000 hotels in nearly 80 countries.

Unlike other chains, which are often a mix of company-owned and franchised units, each Best Western hotel is independently owned and operated. Best Western does not offer franchises in the traditional sense. Rather the chain is operated as a nonprofit membership association, with each hotel acting (and voting) as a member of the association.

Best Western started as a network of independent hotel operators who began making referrals of each other to travelers. The name Best Western was a result of most of their properties originally being located in the Western part of the United States.

Best Western did once start an expansion effort using the name Best Eastern. This did not work well. Best Western is the name travelers know. Think of it as a very large co-operative although in the United States you have to refer to it as a franchise operation. This has been tested in court so in the USA it is a franchise, in China we can think of it as a co-operative. A co-operative that is getting bigger.
Source: Forbes and research.