Leading Lodging Cos. Increase Presence In China
<B>Leading Lodging Cos. Increase Presence In China</B>
By Judy Jacobs
With an increase in international business expected by China's impending entrance into the World Trade Organization and an increase in domestic travel, spurred by economic development, the People's Republic of China continues to be a prime target for hotel developers, who have their sights set on increasing rooms in major cities and adding both upper-level and mid-level brands across the country. Marriott, Starwood and Accor are among those companies leading the way.
Marriott International plans to establish a presence throughout China. "Marriott's initial strategy for China development is consistent with that for the entire Asia/Pacific region: The strategy concentrates on developing Marriott, Courtyard and/or Renaissance hotels in the major gateway cities and then expanding to secondary cities," said Christina Liu, Marriott's spokeswoman in Hong Kong. "To a certain extent, hotels in such destinations as Shenyang and Chongqing came before branded properties in Shanghai or Beijing."
The Shenyang Marriott opened last year as the first Marriott full-service hotel in mainland China. "The target market for this hotel is primarily business travelers and high-end individual leisure travelers. Corporate events and meetings are also a focus," said Chris Tsoi, the hotel's director of marketing. "Shenyang, the capital of Laoning province, has been the key industrial city in the northeast and potentially one of the most important ones in the country. Key industries are automobile, aircraft, arms, steel, iron and coal mining. In recent years, the computer software industry also has been performing very well and has become a very important component of the Shenyang economy."
Also added last year was the Chongqing Marriott, located in the industrial riverport city of Chongqing in the Western Sichuan province. The hotel's main market is business travelers (60 percent), corporate meetings (25 percent) and leisure market (15 percent). Chongqing is the largest industrial and commercial center in southwestern China and the largest port on the upper Yangtze River. Its industrial output includes chemicals, machinery, textiles, aluminum, trucks and motorcycles.
On Sept. 8, Marriott opened the first of three hotels planned for Shanghai. The 315-room Shanghai Marriott Hotel Hongqiao is located in a residential area favored by the expatriate community, not far from the Shanghai Mart and International Exhibition Center, the two largest exhibition halls in Shanghai. The central business district of the Hongqiao Development Zone can be reached in five minutes. The next two Marriotts in Shanghai, the 218-room Pudong Shanghai Courtyard by Marriott and the 362-room JW Marriott Hotel Shanghai, are scheduled to begin accepting guests next year.
Still to come for Marriott, the Marriott Hotel Dalian, is expected to open in March 2002 in Dalian, a major port city in northeastern China. Dalian, which has the second largest harbor after Shanghai and the only ice-free port in northern China, was part of the Japanese-colonized Manchuria until 1945. It remains a center of Japanese business interests, but since the development of the Dalian Economic and Technological Development Zone in the mid-1980s, it has attracted the attention of many other multinationals, who have set up businesses in the city. New air service by Japan Airlines and other carriers in recent years also has made Dalian more accessible to international business travelers.
Starwood is another company developing a multibrand push into the Chinese market. It will open the Four Points Hotel Pudong in the heart of Pudong's Liujiazhui Financial and Trade Development Zone next summer. Last year, Starwood created an alliance with Calif.-based Discovery Hotel Group to develop the Four Points brand in China and this will be its first venture.
The Shanghai project takes over an existing 50-room hotel and expands it to 312 rooms, upgrading facilities so all rooms will be "smart rooms," using computer technology to control room functions, such as lighting, music and air conditioning.
Four Points is expected to help fill a gap for midrange hotels in the Chinese market. "With China's imminent entry into the Word Trade Organization, China will continue to develop as an economic powerhouse and, apart from the multinational corporations, many small and midsize businesses are interested in doing business in China. These business travelers require consistent quality, access to business services and assistance with the forms and processes of doing business in China. Four Points hotels will function as business partners to these travelers, making their China ventures that much more cost-effective and successful," said John Wong, president and CEO of Discovery Hotel Group.
While Starwood plans to cater to midrange business travelers, it also is looking at the upper-end and intends to compete with Four Seasons, Ritz-Carlton and Grand Hyatt, by opening its second St. Regis property in China, the St. Regis Shanghai, in the summer of 2001.
The hotel will be located in Pudong, Shanghai's growing new commercial and financial district. "The area boasts the Jin Mao building as the world's third tallest and the Pearl Tower. I wish that I had the words to describe the vibrancy and growth of this area of Shanghai," said Cary Gray, the hotel's newly appointed director of sales and marketing. "When I first saw it in July, I looked at all of the impossibly high buildings all colored as if from a talented child's crayon box and thought that the only thing missing was the anti-gravity-drive cars of Buck Rogers. If you have been to Kuala Lumpur and stood under the Petronas Twin Towers, you have a mere glimpse of what I mean. Imagine 30 buildings all politely spaced in an area injected with steroids by the PRC government to become the financial hub of the world."
The 40-story, 350-room hotel will be Starwood's first new build St. Regis hotel and include two executive floors and a spa, as well as broadband Internet access in all guest rooms. The property's primary market will be corporate FITs and small, exclusive meetings, Gray added.
The St. Regis will be well-positioned to take advantage of several events and moves by the Chinese government that are expected to make Pudong an even more viable business destination in the future. "Permanent trade status with the USA, entrance into the World Trade Organization, the May 2001 completion of Phase 1 of the Pudong-Shanghai Science-Technology City Center, the APEC summit in Pudong in September 2001 and relentless attention by the PRC government to create a new financial hub in Pudong that outshines Hong Kong, London, New York and Tokyo are all developments that will impact business travel to Shanghai," Gray said.
Meanwhile Accor plans to establish a wide presence in China. "I see Accor having at least 40 hotels in China in the next 10 years," said Gerhard Zimmer, the company's director of operations for China. The priority is Beijing and Shanghai, followed by the capital cities of all the important provinces in China and their secondary major cities. For example, for Sichuan province, Chengdu and Chongqing; for Shandong province, Jinan and Qingdao."
Accor has opened several hotels in China this year and plans to manage the five-star Sofitel Wangda Chengdu, which is scheduled to begin receiving guests next summer. Located on the upper reaches of the Yangtze River, Chengdu is the capital of Sichuan province, which, with 100 million people, is China's most populous. Chengdu also is a center for technology, trade commerce and finance, as well as a transportation hub.
The new 319-room Sofitel will include 10 meeting rooms, a business center, an indoor swimming pool and a spa. It will be Accor's latest addition to its Chinese hotel network and part of the company's plan--in partnership with the Beijing Tourism Group--to locate hotels in strategic commercial centers throughout the country.
Over the past year, the company has opened the 400-room Sofitel Jinan Silver Plaza in Jinan, the capital of Shandong province; the 241-room Sofitel Zhengzhou in Zhengzhou, the capital of Henan province; and the 310-room Novotel Pudong Shanghai.