Hotel Corporations Vie for Luxury Market in China
China's rise as an economic power has also meant a rising need for better hotels to accommodate both foreign and domestic business travelers and tourists.
And, many major hotel corporations have been working hard to fill that void. The InterContinental Hotels Group (NYSE: IHG) has announced “ambitious growth targets” in the People's Republic – including plans to nearly double the number of its hotels in China over the next three to five years.
IHG currently has 200 hotels in China, with 179 more in the planning stages. The company also says it plans to hire an additional 110,000 employees between now and 2015.
“China is IHG’s second largest market after the United States,” company CEO Richard Solomons said in a press statement, “and is likely to surpass the U.S. to become our largest by number of rooms by 2025.”
The announcement, made in Beijing, came as Solomons joined British Prime Minister David Cameron during a trade mission to China.
InterContinental isn't alone in its pursuit of China's luxury hotel market. In October, the Ritz-Carlton Hotel Company, a subsidiary of Marriott International (NASDAQ: MAR), opened a massive hotel in the port city of Tianjin and another in the western Chinese city of Chengdu. The company also unveiled plans to have a Ritz Carlton up and operating in Nanjing by the first quarter of 2015.
Hervé Humler, Ritz-Carlton's president and COO, says the company's growth “reflects our desire to meet the growing Chinese appetite for international luxury hospitality experiences.”
The explosion of luxury hotels also underscores the importance of foreign visitors to the Chinese economy. Mark Grundy, president of Wendy Wu Tours, estimates more than two milion Americans – the majority of them business travelers – will go to China next year.
“China has gone through a lot of changes in the last 40 years, and prior to that, creature comforts were not on the agenda,” Grudy recently told The New York Times, “but an American passenger, the majority of whom are going to be baby boomers who’ve got time and money, expect things to be the way they were back home in the States. And that’s beginning to happen.”
© 2015 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.