Building boom in hotel industry

Updated: 2011-05-27 10:37

By Andrew Moody (China Daily European Weekly)

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"Now developers are quite well traveled and have stayed in hotels in Australia, the United States or Europe and are much more prepared to be flexible in their choices."

Some major Chinese companies are seeing the advantage of buying stakes in hotel and leisure companies in order to bring their expertise back to China.

Fosun International, one of China's largest conglomerates owned by billionaire Guo Guangchan, bought a 9.5 percent equity stake in ClubMed, the France-based luxury resort operator. The company plans to open five resorts in China by 2015.

Chinese investors have so far not been as adventurous in the European hotels sector as investors from Russia, the Middle East and India.

One of the most high profile takeovers recently has been Indian conglomerate Sahara India Pariwar, run by billionaire industrialist Subrata Roy, buying the Grosvenor House Hotel in Park Lane London for 470 million (540 million euros).

Schmitt at Tangram believes such acquisitions might be one way of making European and other Western hotel chains wake up to the demands of Chinese travelers.

"People complain about Chinese hotels not catering for Westerners even when many hotels only have Chinese customers. If you go to Europe the situation is much worse. The most a Chinese person is likely to get in the morning is miso, a Japanese soup. There is no concept of an actual Chinese breakfast. I have been going on about this for years," he says.

Schmitt is trying to give Chinese customers exactly what they want with his new mid-range Tangram concept.

"There will be no swimming pool because the Chinese never go to the pool. We will have a spa area and karaoke, however, and a self -service laundry. We won't save on mattresses because that is particularly important for Chinese customers. We will also have 42 inch TVs, which many top hotels don't," he says.

With so many rooms in the pipeline, China will be the one place in the world where you are unlikely not to find a bed for the night.

Murphy at AHS says room demand remains strong for both leisure and business travel and the Chinese hotel industry will still be in construction mode for the next two years.

"There may be saturation point in some locations but the mid range sector is still underserved both by the current inventory and also by what is planned over the next three to four years," he says.

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