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April 28, 2013

Hotel Industry in China

by peterzihuazhang

Recently, I’ve been reading the Hotel Year Book 2013 published by Ecole hôtelière de Lausanne. The report mentioned about several insights about Chinese hotel industry in 2013 which I want to share with you.

Firstly, a historic challenge for Chinese hotel industry has been its slow average daily room rates relative to other international markets and the quality of hotel service. However, the government is now trying to shift the economy to a more consumption-led model, and this encompasses efforts to increase wages. At the same time, vast sections of China’s middle class are reaching a point where they have acquired apartments, electronics, cars and other tangible goods – so spending is likely to move to more intangible items such as travel and leisure.

Secondly, the hotel business in China is not just about filling the rooms. Several international hotel chains beginning to shift the focus to food & beverage, which has a higher profit margin. Other companies are increasingly focusing very on hot spring and spa, and recreational and entertainment facilities targeted towards local residents as well. 

Thirdly, one of the obstacles for hotel industry in China is the Golden week which forces the entire nation to go on vacation during the exact same weeks of the year. However, this is probably going to change in the next few years. With the insatiable and growing appetite of consumers and their capability to choose going vacation any time of the year, there will be a huge boost in hotel industry.  

Here is the link to purchase the report if you are interested:

http://publications.ehl.edu/eng/Hotel-Yearbook

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