Horwath HTL China have written an insightful article for the 2013 Hotel Yearbook on the seven big challenges facing the Chinese Hotel Market.
The challenges are fascinating, not least because China has been the International driver for hotel development for many years and features so heavily in the growth plans for all the large international operators.
This doesn't mean that China is immune to the potential pitfalls present in more mature hotel economies and is significant, especially as the wider Chinese economy comes under pressure from inflation and a rapidly growing middle class.
The seven challenges explored in the report are as follows:
- Huge hotel bedroom supply
- Pressure on room rates
- Higher wages, fewer staff in the industry
- Revenue streams outside bedrooms
- China specific domestic travel challenges
- Cities over 1 million people
- Chinese brands?
Nigel Summers, Director of North Asia for Horwath HTL said, "China is an incredibly dynamic economy, but that doesn't mean it is immune to classic supply and demand challenges. We have seen incredible growth in travel, tourism and hotel development over the last ten years and if you spoke to the majority of International brands, China would still be the market they regarded as having the greatest potential for growth. When assessing the key challenges facing the industry it's important to look at the gap between the aspirations of the long-term vision against the operating reality on the ground. How are they dealing with the very real issues of over supply, inflation, and an economy that is potentially overheating? China has some significant demographic advantages; the question is how do they harness that?"
The article, written by Nigel Summers Director of North Asia at Horwath HTL is published in the prestigious Hotel Yearbook.The Hotel Yearbook article can be downloaded HERE
