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Unlike in the past, China's hotel industry is currently largely driven by domestic tourism. China's upscale hotel segment is struggling with oversupply. The mid-scale and budget segments are projected to show strong growth going forward.
The mid-scale segment is likely to be driven by an expanding middle class. The budget segment is dominated by local players, whereas the mid-scale segment is fragmented, offering opportunity for market share gains.
Please take Growth of a hotel chain via this is only one aspect in weighing the attractiveness or non-attractiveness as an investment of the companies mentioned and should not be used independent of other factors. This article examines one segment of the companies' businesses, and other factors such as valuation are not addressed.
Their spend is expected to double by Much of this growth was driven by tourists from Hong Kong, Macau and Taiwan. Foreign tourist arrivals have been showing feeble growth; international tourist arrival numbers fell 1.
Travel China Guide Most of China's travelers travel within China, and domestic tourism is the biggest segment of the Chinese tourism market.
And similar to the way Chinese overseas travelers are the world's biggest spending tourists, they are also the biggest spenders in their home market. This is roughly about a quarter of the size of the U. There's still ample room for long-run growth; China's hotel penetration rate is just four hotel rooms per 1, capita.
This compares with the United States' at 20 and the United Kingdom's at Management consulting firm A. Upscale hotel oversupply likely to persist The emphasis has been until recently on luxury hotels which have flooded the Chinese market, and consequently, oversupply has been an issue over the past few years for the upper end of China's hospitality market.
Within China, performance is markedly different. Hotels in first-tier cities have fared comparatively better than lower-tier cities despite a government crackdown on spending due to demand from corporate and business travelers and MICE groups.
Savills China Within top-tier city hotels, those located in Shanghai, China's financial capitalare relatively better off than Beijing; five-star hotel room stocks have been steadily rising in both cities, however, Shanghai hotels recorded better results in both key metrics - the Average Daily Rate ADR and Average Occupancy Rate.
Knight Frank Research Source: Knight Frank Research With luxury oversupply expected to continue going forward according to Fitchhotel operators are increasingly turning to a new segment of China's domestic tourism market - the mid-scale hotel segment.
Mid-scale hotels likely to be driven by rapid middle class growth Unlike China's upscale hotel segment, the mid-market segment has been comparatively overlooked and is underserved. In the past, China's hotel development saw strong growth in the high-end segment, but relatively skinny growth in the middle.
However, with demand increasing across the countrythere is a renewed focus on this segment. Three- and four-star hotels are considered mid-scale in China. Journal of Resources and Ecology While the supply side has seen relatively moderate growth, the demand side is poised to grow.
A growing appetite for travel from China's emerging middle class as well as increased business travel from mid-management workforce is expected to propel demand for this segment of China's hotel industry going forward.
China's middle class is now the biggest in the world and is growing much faster than America's. Even middle-income countries at equivalent stages of development to China have on average consumption ratios almost 20 percentage points higher.
The Chinese government's crackdown on extravagant spending, which cuts down lavish banquets in high-end hotels by government officials, is also a significant growth driver for mid-scale hotels.
With China's upscale hotel segment saddled with excess capacity, the above factors suggest that mid-scale segment will be the growth driver going forward.
Kearney Moreover, unlike the budget hotel segment, China's mid-scale hotel segment is fragmented, thus giving opportunities for market share gains. Kearney International hotel operators have already begun to take note.
MAR and China's Eastern Crown Hotels signed an agreement recently to open mid-scale Fairfield by Marriott hotels in mainland China by aimed at China's fast-growing middle class. Another 40 hotels will be opened later. HLT signed a development agreement with Plateno Hotels Group to jointly bring hundreds of Hampton hotels to China's growing middle class over the next several years.
IHG is greatly increasing the number of hotels in the next five years in China, over half of which will be managed under the mid-scale brand of Holiday Inn and Holiday Inn Express.The hotel industry in India thrives largely due to the growth in tourism and travel.
Due to the increase in tourism with rising foreign and domestic tourists, hotel sector is bound to grow. There is an emergence of budget hotels in India to cater to much of the population who seek affordable stay. Try following the lead of locals by bedding down in a budget European chain hotel.
At a time when every penny counts&mdah;and every euro is worth of them—simply getting a good night's sleep. Ranking as the fourth largest chain, this brand is popular not only with luxury hotels, but also because of the scandalous Paris Hilton’s escapades, the former heir to the empire hotel room.
The company is known propensity for innovations: the first one of its owners have introduced a system of “star” ratings, equipped hotel with Wi-Fi. Growth of a hotel chain via Research paper Writing Service Description for Growth of a hotel chain via Research paper Writing Service .
Apr 23, · Most are scattered across Minnesota, Iowa and Wisconsin, but the chain also recently opened a location in Oxnard, Calif., as part of a hotel franchise development.
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