China: cautious optimism and focus on domestic tourism.
Tuesday, 30th March 2010
Source : China Hotel Development & Financing Conference '10
After a very challenging 2009, hotel industry experts expressed a more optimistic outlook for 2010, particularly with regards to occupancy growth.

There was, however, much caution as significant amount of new supply is expected to enter several key markets, such as Beijing, Shanghai and Hangzhou. Cities such as Guangzhou, Shenzhen and Sanya continue to offer glimmers of hope for the industry. With good service delivery still a challenge, the CTHA urged hotels to focus on training and talent retention in view of the vast growth of the industry in the near future.

According to leaders of major international hotel management companies at the conference, strong performances of hotels in the first quarter of 2010 have boosted confidence in that market recovery is on its way.

Cost control, staff efficiency and training remain top priorities of the industry as companies seize the opportunity to review operations of existing properties. New opportunities for hotel development, on the other hand, were identified in cities located close to and suburbs of key cities, with appropriate brand placement a focus for the hotel management companies. There was much interest surrounding large-scale resort development.

The government-backed development of Hainan Island into an international tourism island proved to be a hot topic at the conference. Developers were also reminded that sustainability, efficient hotel design, construction and staffing were important considerations in hotel development and renovations to ensure the longevity and success of the projects.

Based on analysis by the China International Capital Corporation Limited (CICC), 3 key trends will emerge in the Chinese market in the next 5 to 10 years. The currently export driven economy will shift to focus on the domestic market, as domestic disposable income increases amidst a relatively weaker global environment. As corporations move inland to explore cost efficiencies, central and western cities will become stronger economic drivers in comparison to coastal cities.

The service industry will continue to gain increasing importance in economic development, over the manufacturing industry. 2009 was the first year in history when net imports surpassed exports in the country.

For more information, contact Damien Little, Director of Horwath HTL in China at dlittle@horwathhtl.com or James Chappell, Global Marketing Director at jchappell@horwathhtl.com.

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