Starwood Hotels plans to open 20 hotels in greater China in 2015, including two luxury hotels, 12 high-end hotels, and six select boutique hotels.
The 20 new hotels include one each of the St.Regis and The Luxury Collection brands，two of Westin，two of Le Méridien，eight of Sheraton，four of Four Points by Sheraton，one of Aloft and one of Element.
Starwood Hotels currently has 146 hotels in China, comprising 10% of the over 1,200 global network. It also has 143 hotels under construction and will introduce all nine of its major hotel brands to the Greater China region this year.
After enjoying 30 years of rapid growth since it entered the Chinese market in 1985, Starwood Hotels faced a major shift in the Chinese hotel industry last year brought on by rise in costs, pressure from high commission rates for OTAs, a glut in the five-star hotel supply in certain cities and the anti-corruption crackdown.
“Although the macro-economic environment and economic structure was in flux last year, Starwood Hotels is observing market changes and making necessary adjustments,” said Starwood Hotels Greater China regional director Jin Qian said.
The first of these adjustments is to target China’s second- and third- tier cities, especially touristic destinations. In the next three years it will inaugurate St. Regis hotels in Changsha, Haikou. Lijiang, Macau, Nanjing, Sanya and Zhuhai. It will also introduce the eco-smart hotel brand, Element, to the Asia-Pacific region with an opening in Suzhou Science and Technology Town.
“Our focus on tourism destinations is the future development trend,” Mr. Qian said. “As living standards rise, more Chinese will increase spending on travel and leisure. An aging population also means more Chinese will vacation with parents,” he said.
Having breached the watershed 100 million trips mark for outbound travel, China has proved to be the world’s fastest growing outbound tourism market that will power demand growth in Asia.
“China is the second biggest Starwood Preferred Guest (SPG) club market after the USA and has the fastest growth — 50% of our guests are SPG members,” Mr Qian said, adding that the number of Chinese SPG members who booked rooms with Starwood Hotels abroad grew 21% in 2013.
Starwood Hotels global development vice-president Simon Turner said the Chinese government’s focus of urbanization and economic development policies for interior regions will generate demand for new hotels and airports.
He also told Chinese media that the rise of the middle class, increasing number of outbound tourists and Chinese capital investment in the global hotel industry are all factors in Starwood Hotels’positive long-term outlook for the Chinese market.
As to the future of the market, Mr. Qian thinks that business travelers and regular customers will be the main source of business while official business will decrease. Mr. Turner added that the impact of the anti-corruption campaign on the hotel industry will gradually dissipate.
“Business practices in China are on par with international standards now and I don’t think it [anti-corruption drive] will have any long-term effect,” he said. “If you look at long-term development, consumer trends and government policy trends, you can clearly see that the Chinese market still presents plenty of opportunities,” he said. (Translation by David)
