Starwood To Score Points Throughout China

<B> Starwood To Score Points Throughout China</B>

By Judy Jacobs

Starwood Hotels & Resorts has created an alliance with Calif.-based Discovery Hotel Group to develop Starwood's Four Points brand in China, the first venture into Asia for the company's midprice hotel chain, which currently numbers more than 90 hotels in eight countries.

Four Points is expected to fill a gap in the market in Chinese cities (<I>BTN,</I> June 21). "Our research indicates that there are both geographic and economic opportunities to provide quality and economical lodging to the midprice market in China," said John Wong, president and CEO of Discovery Hotel Group. "There are currently few or no alternatives for such midprice international quality accommodations in many regional hub cities.

"China is developing as an economic powerhouse and many small and midsize businesses are interested in doing business there," Wong said. "Those 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."

Discovery Hotels is planning a fast track development scheme for Four Points in China. "We plan to develop and open at least 10 Four Points properties in China within the next three years. There are many existing hotels in China that we can take over and renovate to Four Points' standards, and this will help us speed up our development timeline. For now we will be looking at existing or almost completed hotels to acquire. In the future, we will consider developing hotels from the ground up," said Wong.

"We plan to operate hotels in both primary and secondary cities in China. In primary cities such as Shanghai, Beijing and Guangzhou we will be the value alternative to five-star foreign hotels and charge 20 percent to 30 percent less for our accommodations," Wong said. He added that midmarket properties like Four Points are suitable for secondary cities such as Dalian, Wuhan and Chongqing, where it is often not cost-effective to build and operate five-star hotels.

Ted Teng, president of Asia/Pacific division of Starwood Hotels and Resorts Worldwide sees Starwood as playing an important role in China's economic growth. The Chinese government has been very quick to spread out economic development beyond the gateway cities of Beijing and Shanghai to its secondary cities, he said, and "our hotel development is part of the infrastructural growth and modernization of these cities."

Each Four Points property will cater to business travelers, with the facilities they've come to expect, such as computer dataports, full-size work desks, 24-hour business centers and full service meeting facilities. Wong also sees a market for extended-stay, serviced apartments and intends to have 15 percent to 20 percent of China's Four Points room inventory catering to this market segment.

The main competition is expected to be other midprice international chains, rather than Chinese-managed local properties. "Four Points Hotels will compete with hotel brands such as Courtyard by Marriott, Holiday Inn and Ramada," Teng added.