Margaret Bowler, director Global Hotel Relations at HRG (Hogg Robinson which was founded in 1845), said in a survey of the world: ‘The hotel industry reported strong performance in 2007 - although not to the levels of 2006 with many key cities achieving single as opposed to double digit growth.’

Only five of the 50 cities surveyed for the global average room rate listing recorded a decline in rates in 2007, none of them in China.

Growth in average room rates in China is comparatively low, with the market lagging behind its BRIC (Brazil, Russia, India and China) counterparts. The illustration shows the four countries with a neat pun on BRIC.

Significant hotel openings, particularly in the country’s financial capital Shanghai and in Beijing, have served simply to ‘mop up’ increased demand from Western hotel brands, with occupancy rates falling marginally as a result in many cities.

This effect is expected to balance out with the Olympics.

‘The Chinese market operates very differently from other markets; Chinese business travellers prefer to stay in branded hotel chains that they recognize.

As such, Western hotel chains are scrambling to establish a presence in China to encourage the growing number of Chinese business travelers to stay in their hotels whilst traveling overseas.

As the industry continues to grow there is a marked increase in the shortage of rooms with availability posing an ongoing challenge in certain cities.
Source: MICE BTN

For many Beijing expatriates, the looming Olympic Games presents a possibility to bypass the chaos in August, vacating their homes in order to collect fees of up to RMB3,000 ($420) per night — or even more — from tourists seeking an alternative to hotel accommodation.

Hundreds of Westerners have already reached private agreements to become home-stay hosts, either through specialized agencies or direct negotiations with tenants.

Homestay Beijing specializes in this area. The owner of the agency, Piet Bos, said, ‘Each home is different, but as a rule of thumb, the current rate we use to establish pricing for home-stays is RMB500-750 per person that can stay in the apartment per day. In other words, if you have a two-bedroom apartment, where a maximum of four people can stay, then the average price per night is RMB2,000-3,000 yuan.’

For Olympic visitors, home-stay accommodation can be more affordable than staying in a hotel, as well as providing greater living space and a more localized experience of life in the Chinese capital.

Meanwhile, local expat websites such as Beijing Community have also become forums for individuals to reach private home-stay agreements.

In January, the Beijing Tourism Administration announced the recruitment of 1,000 local households as ‘Olympic family hotels’.
Source: China.org.cn

An official said reports of Beijing hotels ramping up prices for next year’s Olympic Games are based on a misunderstanding of Chinese negotiating techniques.

Local media reports in the first half of this year said hotels in the Chinese capital were charging up to 10 times their usual rates for next August.

Penny Xiang, deputy director of Games Services for Beijing Organising Committee (BOCOG) said, ‘It is a game between the hotel owners and the market. The reason is that there were many enquiries at that time, which released a signal that the market demand was extremely high.’

Penny Xiang said the exorbitant rates are mainly a sales strategy of the hotels and reasonable deals were available if buyers kept haggling.

She said, ‘As far as I know there are not many hotels that have actually signed contracts with clients, and those that have signed contracts are actually not at very high price.

‘The Chinese way of dealing with something we’re not sure about is to wait and see, especially when many hotel owners thought they could get a better price next year.’

But city officials and Olympics organizers contributed to the rush for hotel rooms earlier this year by urging visitors to book early in order to guarantee a room.

Penny Xiang said the Organising Committee had already booked 70% or more of the rooms in 122 top-ranked hotels closest to the Olympics venues. Those rooms are reserved for visiting Olympics officials, sponsoring companies and the media.

For all of the remaining hotel rooms Penny Xiang said that she was confident the market would settle down closer to the time the Games begin.

She said, ‘When the demand and supply reach a balance, it will not be possible to keep demanding such high prices.’

Beijing is expecting 500,000 foreign visitors and more than a million domestic tourists in a daily flow of about 280,000 during the Games.
Source: Washington Post

The National Day holiday gave an idea of how hotels respond to suppy and demand and shows, perhaps, what we can expect at the Olympics.

Zhang Wei of online travel service Ctrip.com said some popular tourist cities such as Sanya, Hangzhou, Guilin, and Xiamen raises their rates during the Golden Week. And a growing number of tourists drove up the demand for budget hotels throughout China. The Chang Long Hotel, Nanning, seen in our illustration was no exception.

Zhang Wei said, ‘Take Guilin as an example, the price for five star and four star hotels grew by 25% and 50% respectively, while the three star hotels have seen the largest price increase of 80% as they are the main choices for ordinary people.’

In contrast, the big business cities like Shanghai, Beijing and Guangzhou saw prices drop in five star hotels.

During peak season, the average room price at a Beijing Prime Hotel is RMB800 to 900 ($106.5 to 119.8). During the national holiday, the price dropped about RMB200.

Li Siwe, in charge of the marking for the hotel, said, ‘In the golden week, our target clients are domestic tourists from other provinces, so we have to adjust the prices according to their budgets.’

The Shanghai Marriott Hotel Hongqiao normally charges RMB1700 to 1800, but during the upcoming holiday, the price dropped to RMB800. The management agreed the the drop in prices is all about the type of guests they recieve.

Now, after the National Holiday, it’s back to business as usual for hotels in cities like Shanghai. They will not be inexpensive.
Source: China Daily

More than 2,600 hotels across the country have been designated as the venues for Party and central government officials to stay during their official business trips and conferences.

A meeting co-sponsored by the Communist Party of China (CPC) Central Commission for Discipline Inspection and the Ministry of Finance on Friday said Party officials and officials and staffers of central government departments must stay in designated hotels during their business trips, and prohibited them from transferring the accommodation fees to local governments.

The meeting also forbids Party officials and central government staffers from demanding for services not included in the agreements reached with the hotels.

China introduced new methods to improve management on January 1 this year.

The new methods require officials and staffers from the central government departments to stay in designated hotels and capped the accommodation fees. The move is widely acclaimed as a new step to fight corruption and help build a clean government.
Source: People’s Daily Online

The hotel market in Asia Pacific is seeing much stronger growth this year than last according to half year results from the HotelBenchmark Survey by Deloitte. Room revenue per available room (revPAR) across the region is up 14.1% to $97 – outperforming the 9.4% growth achieved in 2006.

Improvements have been driven by double-digit increases in average room rates, which now stand at an average of $137.

The key winners in 2007 have been Asia’s resort destinations. Bali has continued to recover despite fresh travel warnings and achieved the region’s highest revPAR growth at 58.6% in the first half of 2007.

On the down side Bangkok has seen occupancy down 7.8% compared to last year, curbing revPAR to $82.

China meanwhile is seeing huge developments in its hotel industry but new hotel openings in all sectors of the market have diluted occupancy levels and slowed performance growth.

Shanghai, which will see its supply grow by over 6,000 rooms in 2007, has seen revPAR fall 1.2% to $97 in the first half of 2007.

Lorna Clarke, Executive Director of HotelBenchmark at Deloitte added: ‘The Asia Pacific hotel market continues to perform well with performance dominated by improvements in average room rates. The growth of low-cost airlines is making the region more accessible, allowing tourists to travel more easily to a wider range of destinations.

‘Ten years on from the start of the East Asia’s financial crisis and regional economies are also performing well, match this with greater intra-regional business travel and you can see how hoteliers are able to continue to push average room rates upwards.’

It is interesting looking at the figures to see that Mumbai leads with an amazing $253 average per room compared with the lowest, Penang, at $69. If Mumbai leads the pack it is worth pondering on what a suite at the Taj Mahal, pictured above, would cost. Worth accessing the site to see a chart of the comparative figures.
Source: Travel Daily News