The World Tourism Organization has forecast that the Chinese
mainland is expected to become the world's second most-popular
tourism destination after France by 2010.
Several factors will contribute, including a strong economic
backdrop, and further opening of the domestic tourism market to
foreign tour operators.
There is also a fast-emerging MICE market (meetings, incentives,
conventions and exhibitions) as well as several milestone events
like the 2008 Beijing Olympics and 2010 Shanghai World Expo.
Therefore, key gateways such as Shanghai and Beijing continue to
be the preferred investment locations for hotels, while investors
are also showing interest in hotels in more prominent second-tier
cities where opportunities are more available.
The potential gains are considered attractive, says a recently
published industry digest by Jones Lang LaSalle Hotels.
Shanghai
Tourism and demand for accommodation in the country's commercial
and financial center is expected to grow over the coming years.
Shanghai remains the pilot market on the Chinese mainland for
new hotel brands, says the report.
In 2006, JIA boutique hotel launched its outlet on Nanjing Road
W. whilst Accor has unveiled a Pudi boutique hotel close to Fuxing
Park. Under development are a Conrad and a Jumeirah in
Xintiandi.
Drivers for robust accommodation demand include the city's
hosting of world-class events such as the Special Olympics, FIFA
Women's World Cup in 2007, annual events such as Formula One and in
particular, World Expo 2010.
In addition, the development of three major convention areas in
Pudong, Hongqiao and Nanjing Road W. as well as new exhibition
facilities will further cater to the growing MICE demand. The
construction of Shanghai Happy Valley, which is supposed to be the
biggest theme park in eastern China, will likely attract about five
to seven million visitors every year upon its completion in
2010.
Moreover, upgrades to the city's airports will encourage further
growth of inbound arrivals. By next year, Pudong airport will have
two terminals and three runways while the expansion of Hongqiao
airport features a new 3.3-kilometer runway and a
250,000-square-meter terminal is slated to open by 2010.
In terms of future supply, the Jones Lang LaSalle digest has
found that more than 6,982 four- to five-star hotel rooms are under
construction and being planned from 2007 onwards.
Significant international projects in the pipeline include the W
Hotel Pudong by Starwood, the Wyndham, the HanTang Jumeirah and
Conrad hotels, all of which have chosen Shanghai as their launch
pad on the Chinese mainland.
Beijing
As one of the largest and fastest-growing cities in the world,
tourism and the hotel market are forecast to experience strong
growth over the medium to long term.
A favorable economic outlook, a growing MICE market, better
infrastructure as well as the city's hosting of the 2008 Olympics
will all propel Beijing's tourism and hotel growth, says Jones Lang
LaSalle.
Meanwhile, Beijing has been a key entry market for investors
keen to ride the growth on the Chinese mainland. The influx of
international brands helps further promote the city to the world
and potentially increase room rates.
International hotels are expanding their footprint beyond
traditional locations within the Central Business District,
Wangfujing and the Lufthansa Center.
They are now establishing a presence at Financial Street, Xidan,
Zhongguancun, south of Chang'an Avenue, the airport and the new
Exhibition Center area in Shunyi to satisfy growing demand.
Moreover, driven by the growth potential of the Beijing hotel
market, international operators are putting their flags on
properties in multiple locations in the capital city.
For instance, Ritz-Carlton is located at both Financial Street
and China Place while Westin is at both Financial Street and the
Landmark area.
Beijing Municipal Tourism Bureau announced earlier that the
supply of star-rated hotels could increase to 800 properties to
accommodate the needs of the 2008 Olympic Games, almost 23 percent
more than the current level.
Among the new supply, 76.5 percent, or 9,710 rooms, is expected
to enter the market in 2007 and 2008, just in time to capture the
Olympic demand.
(Shanghai Daily December 4, 2007)
