Hotel, industry and travel news from around Greater China; this week: China reforms VAT, another Shangri-La for Shanghai and more....

VC INVESTMENT IN CHINA DOWN 40% IN 2012

According to China Daily and Ernst & Young, a total of US$3.7 billion was invested in 202 rounds of venture capital investment activities in China in 2012, down about 40 percent year-on-year. In 2012, Beijing has become a popular investment destination for VC. While in 2012, the average round size was US$19.9 million, well above the global average of US$8.4 million.  
 
CHINA PONDERS ON ENVIRONMENTAL TAX TO PROMOTE PROTECTION

According to China Daily, Chinese government is aiming to introduce environmental taxes contributing to the country's eco-compensation mechanism. In addition, the government is also planning to further a reform in the resource tax system as a measure to increase compensation for environmental protection and ecological preservation efforts. According to the National Development and Reform Commission, over the last 12 years, the annual investment of the central government in eco-compensation has grown from RMB2.3 billion (US$368 million) in 2001 to RMB78 billion in 2012, with the total sum reaching RMB250 billion. 
 
CHINA TO COMBAT TOURISM PRICE HIKES

The third draft of China's Tourism Law was delivered to the lawmakers recently seeking to curb price inflation at scenic spots. The purpose of the draft is to apply strict controls on the costs of tickets for natural scenery and ancient relics in China. In accordance to the draft, such areas should hold hearings before raising prices to implore opinions from tourists and business owners on whether the charges are necessary and reasonable. Last discussed in August and December of 2012, this draft law is the country's first legislation covering the tourism industry. 
 
GHM TO DEVELOP HISTORIC CHINESE PORTFOLIO

According to Travel Daily Asia, GHM's new Chinese subsidiary, Ahn Luh Resorts & Residences, has penned management contracts for two traditionally-styled upscale hotels in Shanghai and Zhejiang province. First to open in autumn 2014 will be the Ahn Luh Lanting – a 99-room development incorporated into 35 heritage houses in Shaoxing. Then in spring of 2015, the Ahn Luh Zhujiajiao will open in a historic Shanghai suburb. The property will consist of 35 villas built in a traditional Chinese style plus a museum. The two hotels are owned by the Qinsen Group, whose chairman, Qin Tongqian, has been collecting historic Chinese artwork and antiques for the last two decades. Part of his collection of art, furniture and stone carvings will be showcased in the two hotels.  
 
FOREVER 21 TARGETS CHINESE MARKET WITH NEW SHENZHEN LOCATION

According to China Retail News, American fashion brand Forever 21 will reportedly open its first store in Coastal City, Shenzhen. A representative from Coastal City also confirmed the news and said the new store is expected to be launched this summer. Forever 21 is a popular fashion brand in America. Its target customers are vibrant urban people between 20 and 30. Forever 21 has over 500 chain stores around the world and its sales are among the top five in America. With a similar positioning with H&M and Zara, Forever 21 currently only have three outlets in China, one in Beijing, one in Hong Kong, and one in Shanghai.  
 
CHINA HOTELS TO BENEFIT FROM REPOSITIONING

In accordance to the 9th China Hotel Investment Conference and Hotel NewsNow.com, many hotel owners in China are facing a need to quickly reposition their hotels to capitalize on the evolving market. Some brands and owners are seeing the benefit of downsizing or reflagging a hotel to a brand that charges a lower rate. The situation makes sense in China because the owner can capture new travellers looking for a mid-priced option and step out of the crowded luxury segment. Also, the owner can choose to lose one or two of the F&B outlets, which would save on food and labour costs.

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