Hoteliers in Asia Pacific see blue sky ahead
HONG KONG – An interesting article in the International Herald Tibune indicates the outlook for the hotel industry in Asia will continue to defy the economic slowdown.
The article by Bettina Wassener canvassed the opinions of a wide range of hoteliers and industry observers.
“Look at the statistics,†said Hong Kong-based Paul Foskey, who heads Marriott International’s Asia business.
“The United States currently has 4.9 million hotel rooms catering to a population of 300 million. Europe has about 5.3 million rooms. China, with its population of 1.3 billion, has only 1.7 million, and India barely has 120,000.
“There’s a lot of runway left in these countries.â€
Ian Wilson, general manager Asia at Fairmont Hotels & Resorts, said that in 10 years China is expected to have a middle class of 400 million. “That, and a growth rate of six percent-plus this year — if you got that in the West, everyone would be high-fiving each other.â€
Frits van Paasschen, chief executive of Starwood, said, “The growth opportunities in Asia-Pacific are unsurpassed perhaps anywhere in the world.â€
Predictions for strong growth are being made at a time when revenue is down 28.4 percent the Asia-Pacific region this year, and the situation in China is even worse.
A number of new hotels opened in Beijing and Shanghai for the Olympics last year and the 2010 World Expo set for next year, adding a lot of supply at a time of low demand.
Revenue per available room plunged 56 percent in Beijing in the first eight months of this year, according to a recent report by the Deloitte consulting firm.
In Shanghai, the figure was down 35 percent, as many hotels stand half empty.
Albert Edwards, head of global strategy at Société Générale, at a media briefing in Hong Kong said, “Europe and the United States are still in a total mess, and Asia is not immune to what’s going on there,“
Within China, too, the picture is varied,” said Martin Rinck, Asia-Pacific chief at Hilton Worldwide.
While hotels in China’s main international gateways — Shanghai, Beijing and Hong Kong — are under pressure, business in the secondary and tertiary cities in the country’s vast interior has mostly stayed resilient, as those areas depend less on international travel, and are more exposed to domestic Chinese travellers.
“Domestic destinations are doing very well,†Rinck said. “Cities like Hefei and the resort of Sanya — here, it’s more than 80 percent Chinese clients, and they have not stopped coming. Demand here is still increasing.â€
Add to that China’s solid infrastructure. “China is building tens of thousands of kilometers of highways and railway track, and 97 new airports. This is the place to be,†said Richard Solomons, finance chief and head of commercial development at InterContinental Hotels Group.
Ian Jarrett
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