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Maybe China is Not So Hot After All?

Where: China
November 16, 2011 at 11:21 AM | by | ()

Starwood Personalized Travel's tea cup and amenities menu translated to Chinese.

Hotel companies have gone gaga for China over the past few years opening tons of new hotels in the burgeoning economic powerhouse but maybe they were a little too overzealous?

A new report out says that four in 10 hotel rooms in China are empty, for about an average occupancy rate of 61 percent. And that number is not so comforting with more and more hotels in the pipeline. BusinessWeek had the full story including this omnious quote from a hotel analyst:

"Hotels in some markets of China are clearly oversupplied in the next three to five years and they won't be generating good returns, " said Nigel Summers, Hong Kong-based director at Horwath Asia Pacific, which tracks the hospitality industry. "China has had a very strong demand. The question is whether the increase in demand is going to be big enough to handle all the new hotels."

Some examples of the push by branded hotels in China? Hilton Hotels plans to have 100 hotels in China by 2014, four times as more as they currently have. InterContinental Hotel Group says that one in four hotels rooms that open globally open the next five years will be in China. Hyatt is working on 31 hotels in China while Starwood, who is pushing their Sheraton brand hard over there, says that China may pass the U.S. as their biggest market.

Hmm...this sounds like a perfect time for Priceline to expand in China, no?

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