Page 198 - 2015_WhitePaper_web
P. 198
5 White Paper on the Business Environment in China
2.8 Hospitality
“IN 2009, THE State Council added tourism as another an additional approximately 53 million “Overnight Tourists”
pillar industry in the 12th Five-Year Plan,” Xinhua were apparently not included in the 130 million total.3
reports. “[Tourism] is widely believed to be the major factor
that propels the country’s hotel industry.”1 What is today a is large number of Hong Kong- and Macau-related
competitive and lucrative industry on the Mainland comes entries may account for the disproportionately high number
from humble beginnings, however: prior to the “opening-up” of visitors to Guangdong (being adjacent to both Hong Kong
of China in 1978, the hospitality industry consisted primarily and Macau)—in 2008, Guangdong received nearly ve times
of government-run guest houses and associated services. After as many overall visitors as Shanghai and more than ve times
the decision to provisionally open China’s economy to outside the number of visitors to Beijing. Guangdong’s total number
participation in 1978, the government administration at the of 25.6 million visitors dwarfs Shanghai’s total of 5.2 million
time responsible for tourism arranged eight joint venture and Beijing’s 3.7 million.3
hotels in Beijing, Shanghai and Guangzhou.2
More recent visitor statistics from the National Tourism
While the o cial title of ‘ rst hotel in China’ is Administration indicated that entries had again declined in
apparently contested, the White Swan Hotel in Guangzhou 2009, with a total of 126.5 million in that year, with the
and the Jian’Guo Hotel in Beijing are the earliest-established largest adjustment being a 9.82 percent growth rate in the
joint venture hotels in the country. Notably, the White “foreigners” category.4
Swan Hotel is credited as running a pro t in its rst year of
operation, 1983.2 e rst three months of 2010 appeared to show a recovery
from this downward trend, with the largest gain, an increase of
Signi cantly, foreign management companies have held 21 percent, again being in the “foreigners” category.5Statistics
a role in the industry since the beginning—Hong Kong from the National Tourism Administration reported a
Peninsula Hotels was contracted to manage the Jian’Guo number of 134 million international visitors attracted to
Hotel from its opening, after which Sheraton Hotels & Resorts mainland China in 2010, which is expected to reach 153
was brought in to manage what became the Sheraton Great million by 2015.6 A 0.93 percent increase was recorded for
Wall Hotel (also in Beijing) after two years of unsuccessful overall visitors between January and September in 2011.7
operation under its former management.2
In December 2008, China Daily reported a Ministry of
Beginning in the 1980s, construction of hotels beyond Commerce release stating that accommodation and catering
the original government-run guest houses began in earnest. retail sales between January and November 2008 had risen
Between 1980 and 1990, 1,784 new hotels were built, and in 24.9 percent year-on-year to 1.39 trillion yuan, and that there
the decade following 8,494 more were opened for a reported were 591 new foreign-invested companies in the sector—31.4
total of 10,481 ‘tourist hotels’ with nearly 950,000 rooms in percent fewer than the same period in 2007—and “the actually
2000.2 In 2001 a nomenclature change from ‘tourist hotels’ to utilized foreign funds slipped 11.9 percent to $840 million.”8
‘Star-rated hotels’ saw the total number of reported facilities
shift to only 7,358 in 2001, growing to 13,583 in 2007.3 e following year, the Ministry reported even fewer
new foreign-invested projects in the accommodation
Between 2004 and 2007, mean growth in the number and catering industries (41 and 90 fewer than 2008,
of “Overseas Visitor Arrivals” (including residents of Hong respectively); utilized foreign capital in the accommodation
Kong and Macau Special Administrative Regions and Taiwan) sector predictably declined (by 20.6 percent, in this case),
was approximately 11 percent (although year-on-year growth although utilized capital in the catering sector actually
declined from approximately 10 percent in 2005 to only 5 increased by 7.2 percent.9,10
percent in 2007).3 From 2007 to 2008, however, the total
number of foreign fell by approximately one percent—a It is possible some part of this decrease in foreign investment
somewhat surprising result considering that the Summer is related to the 2007 revision to the Catalog for the Guidance
Olympics were held in Beijing that year.3 of Foreign Invested Enterprises, which beginning December
1, 2007, prohibited foreign direct investment in hotels. While
at year there were a reported 130 million recorded the majority of western ‘name brands’ primarily manage
“Overseas Visitor Arrivals” in the PRC, of which 26.1 million properties for local developers, the revision also a ected
were foreign passport holders (excluding Hong Kong and non-Chinese Asian developers, who have been more directly
Macau residents). 101.3 million were “Chinese Compatriots invested in development.11
From Hong Kong and Macao”, 4.4 million from Taiwan and
Another factor to consider is the already-high saturation of
198 major international Hotel brands, particularly in the high end
2.8 Hospitality
“IN 2009, THE State Council added tourism as another an additional approximately 53 million “Overnight Tourists”
pillar industry in the 12th Five-Year Plan,” Xinhua were apparently not included in the 130 million total.3
reports. “[Tourism] is widely believed to be the major factor
that propels the country’s hotel industry.”1 What is today a is large number of Hong Kong- and Macau-related
competitive and lucrative industry on the Mainland comes entries may account for the disproportionately high number
from humble beginnings, however: prior to the “opening-up” of visitors to Guangdong (being adjacent to both Hong Kong
of China in 1978, the hospitality industry consisted primarily and Macau)—in 2008, Guangdong received nearly ve times
of government-run guest houses and associated services. After as many overall visitors as Shanghai and more than ve times
the decision to provisionally open China’s economy to outside the number of visitors to Beijing. Guangdong’s total number
participation in 1978, the government administration at the of 25.6 million visitors dwarfs Shanghai’s total of 5.2 million
time responsible for tourism arranged eight joint venture and Beijing’s 3.7 million.3
hotels in Beijing, Shanghai and Guangzhou.2
More recent visitor statistics from the National Tourism
While the o cial title of ‘ rst hotel in China’ is Administration indicated that entries had again declined in
apparently contested, the White Swan Hotel in Guangzhou 2009, with a total of 126.5 million in that year, with the
and the Jian’Guo Hotel in Beijing are the earliest-established largest adjustment being a 9.82 percent growth rate in the
joint venture hotels in the country. Notably, the White “foreigners” category.4
Swan Hotel is credited as running a pro t in its rst year of
operation, 1983.2 e rst three months of 2010 appeared to show a recovery
from this downward trend, with the largest gain, an increase of
Signi cantly, foreign management companies have held 21 percent, again being in the “foreigners” category.5Statistics
a role in the industry since the beginning—Hong Kong from the National Tourism Administration reported a
Peninsula Hotels was contracted to manage the Jian’Guo number of 134 million international visitors attracted to
Hotel from its opening, after which Sheraton Hotels & Resorts mainland China in 2010, which is expected to reach 153
was brought in to manage what became the Sheraton Great million by 2015.6 A 0.93 percent increase was recorded for
Wall Hotel (also in Beijing) after two years of unsuccessful overall visitors between January and September in 2011.7
operation under its former management.2
In December 2008, China Daily reported a Ministry of
Beginning in the 1980s, construction of hotels beyond Commerce release stating that accommodation and catering
the original government-run guest houses began in earnest. retail sales between January and November 2008 had risen
Between 1980 and 1990, 1,784 new hotels were built, and in 24.9 percent year-on-year to 1.39 trillion yuan, and that there
the decade following 8,494 more were opened for a reported were 591 new foreign-invested companies in the sector—31.4
total of 10,481 ‘tourist hotels’ with nearly 950,000 rooms in percent fewer than the same period in 2007—and “the actually
2000.2 In 2001 a nomenclature change from ‘tourist hotels’ to utilized foreign funds slipped 11.9 percent to $840 million.”8
‘Star-rated hotels’ saw the total number of reported facilities
shift to only 7,358 in 2001, growing to 13,583 in 2007.3 e following year, the Ministry reported even fewer
new foreign-invested projects in the accommodation
Between 2004 and 2007, mean growth in the number and catering industries (41 and 90 fewer than 2008,
of “Overseas Visitor Arrivals” (including residents of Hong respectively); utilized foreign capital in the accommodation
Kong and Macau Special Administrative Regions and Taiwan) sector predictably declined (by 20.6 percent, in this case),
was approximately 11 percent (although year-on-year growth although utilized capital in the catering sector actually
declined from approximately 10 percent in 2005 to only 5 increased by 7.2 percent.9,10
percent in 2007).3 From 2007 to 2008, however, the total
number of foreign fell by approximately one percent—a It is possible some part of this decrease in foreign investment
somewhat surprising result considering that the Summer is related to the 2007 revision to the Catalog for the Guidance
Olympics were held in Beijing that year.3 of Foreign Invested Enterprises, which beginning December
1, 2007, prohibited foreign direct investment in hotels. While
at year there were a reported 130 million recorded the majority of western ‘name brands’ primarily manage
“Overseas Visitor Arrivals” in the PRC, of which 26.1 million properties for local developers, the revision also a ected
were foreign passport holders (excluding Hong Kong and non-Chinese Asian developers, who have been more directly
Macau residents). 101.3 million were “Chinese Compatriots invested in development.11
From Hong Kong and Macao”, 4.4 million from Taiwan and
Another factor to consider is the already-high saturation of
198 major international Hotel brands, particularly in the high end
