The annual China Hotel Investment Watch, now in its sixth edition, serves as an important indicator of the investment climate in the Chinese hotel market for stakeholders in their effort to evolve the Chinese hotel industry to the next level!
The hotel industry in China is among the most dynamic in the world. The real estate boom of the past decade has promoted hotel development on an unprecedented scale and blistering pace. Supply surges were first witnessed in coastal cities and key commercial centers catering to a mostly international traveler base with international hotel brands.
In other parts of the country domestic hotels catered largely to government demand. Over time, secondary and tertiary cities were caught up in the real estate boom and also witnessed the rapid increase in international hotels.
Given the pace of development and level of foreign investment the attention is now drawn to demand. How to entice domestic companies to spend more on their employees’ travels and for tourists rebalance their spending?
An emerging middle class and younger generation has their own set of priorities and preferences when choosing accommodation presenting a structural change in demand.
It is in this environment that hoteliers are challenged to find new ways to capture demand, drive revenues and enhance their bottom line. The drop in food and beverage spending has significantly increased competitiveness with local dining options that offer better value that local travelers are accustomed to.
Investors and operators alike must thus envision a different hotel guest landscape than what was observed over decades past. New business models and investment rationales are called for. The performance of budget hotel chains shows that opportunities do exist in the market.
Many of these solutions are however ‘outside the box’, something that has proven difficult for hotels to achieve in the past. Now, new brands are being launched and concepts being tested. Technology is still perceived as an investment rather than opportunity cost. A different way of thinking and better solutions are called for. Is it time to learn from tech companies?
At the same time, one should never lose sight of the fundamentals that make a hotel feasible. Investment rationales will need to be revised and existing hotels will need more proactive asset management to maintain performance and deliver returns.
The 6th edition of the China Hotel Investment Watch covers 7 areas and 30 markets. Below are links to three of those markets (Click the city name):
For more information on the China Hotel Investment Watch 2015, please contact: Daniel J Voellm  dvoellm@hvs.com or Cathy Nie  nyuan@hvs.com.
About Daniel J Voellm
Daniel J Voellm, Managing Partner HVS Asia-Pacific, is based in Hong Kong and has provided advice in all major markets across 18 countries in the region. Daniel started his career at HVS in the New York office; as Vice President at the global headquarters, he conducted a wide range of appraisals and market studies as well as underwriting due diligence services in 22 US states and in Canada. Daniel brings a strong understanding of the hospitality industry to HVS.
His experience in hotel and food and beverage operations in Germany, Switzerland, England and the USA is complemented by an Honours Bachelor of Science degree from Ecole Hôtelière de Lausanne in Switzerland. Daniel works closely with key institutional and private owners of hotel properties, financiers, developers and investors, and has gained a strong understanding of their investment requirements and approaches to assessing the market value of investment properties. Daniel further advises on property and concept development and strategy.
About Cathy Nie
Cathy Nie is an Analyst in Beijing office. She provides market studies, feasibility studies and operator search for hotels, resorts, and mixed use projects in China. Also she is the one of the main authors and editors of the China Hotel Investment Watch 2014, 2015, which is an important guide book for investors and operators in hotel industry.
