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Foreign enterprises have a significant impact on the industry’s development and have introduced brand and chain management concepts and higher service standards to China.
Filed under Hospitality, News, North AsiaSAN FRANCISCO, 11 March 2013: China’s hotel industry has seen a growth of 6.9% on average and earnings estimated at US$44.1 billion in five years through 2013. Growth has been driven by greater numbers of domestic and international tourists, says IBISWorld. Higher room prices and industry deregulation have also contributed to the industry’s development. The concentration level of the hotel industry in China is very low with the top four players – Shangri-La, InterContinental, Guangdong (International) Hotel Management Holdings, and Shanghai Jinjiang International Hotels Development – accounting for less than 5% of revenue. However, there is a trend toward consolidation according to the IBISWORLD report, but independent hotel operators still dominate the market place particularly in the low-star rating. Foreign enterprises have a significant impact on the industry’s development and have introduced brand and chain management concepts and higher service standards to China. Foreign hotel chains are strong in the high-end market, but have recently started moving into the lower-star rated segments. Many foreign hotel management companies have started developing hotels with four- and three-star ratings to capture a larger spectrum of customers and strengthen market positions. The Hotel industry will continue to expand, driven by rapid growth in China’s economy and the development of the tourism sector. Demand growth is projected in terms of the number of tourists and of average per-guest expenditure. IBISWorld also anticipates growth in the share of revenue contributed by three- and four-star hotels. |
