China's Hotel Market Is Going Strong

Sunrise Kempinski Hotel BeijingChina and Hong Kong are experiencing strong performance in terms of hotel performance and industry growth.

A new special market report on Hong Kong by Horwath HTL shows that as of December 2014, there were 244 hotels with 72,721 rooms in Hong Kong, an increase of 2,704 rooms or 3.9 percent over 2013. Despite the increase in supply, the market-wide occupancy edged up from 89 percent in 2013 to 90 percent in 2014. The average daily rate recorded in the market was 1,453 Hong Kong dollars ($187.18) in 2014.

According to the Horwath report, hotel supply in Hong Kong is expected to increase at a compound-average-annual-growth rate of 4 percent in the next five years, reaching a total of 303 hotels with 83,408 rooms in 2019.

Because of significant barriers to entry, Horwath reports there are initiatives to allow conversions of old industrial buildings and revitalization of heritage buildings into hotels. Examples of the former include the Dorsett Hotels in Mong Kok, Tsuen Wan and Kwai Chung, while examples of the latter are namely the Hullett House Hotel and the Tai O Heritage Hotel. Other heritage buildings that are to be converted into hotels in the future include the historic police station in Wanchai, a historic shop house in Mong Kok, a building in Stanley and also the Murray Building in Central.

The tourism industry contributed to 4.9 percent of Hong Kong's gross domestic product and employed approximately 270,000 people in 2013, according to Horwath. That represents 7.2 percent of the city's total employment.

In China at large, approximately half of all new hotel projects currently under construction in the Asia Pacific region are located in China, according to Travel Daily Asia.

TDA reported on STR numbers for the region, which show there are now 1,024 hotels comprising 253,320 rooms being developed in Asia Pacific. And 455 of these hotel projects, with a total of 140,455 rooms, are located in China.

This means that China accounts for 44 percent of the hotels under construction in Asia Pacific, and 55 percent of the rooms.

Recently opened hotels in China include:

- The Sunrise Kempinski Hotel Beijing, which opened in November, has 306 guestrooms and suites spread across 21 floors. The entire complex in which Sunrise Kempinski sits takes up 14 square kilometers. Aside from the main hotel, there are an additional 111 rooms at the Yanqi Hotel and another 178 spread across 12 boutique hotels on a nearby private island. The complex has 14 restaurants and bars, two spas, a private marina, pagoda, recreational and fitness facilities and a kids club. Construction took two years.

- Aman Resort's third property in China, Amandayan, opened in February in the city of Lijiang. The 35-suite hotel features a spa, several food-and-beverage options, an outdoor swimming pool, a Pilates/yoga studio and gym, a library, a private cinema and meeting room facilities.

- A new Shangri-La property opened in China's northeastern city of Nanchang in February. The 473-room Shangri-La Hotel, Nanchang features a gym, 82-foot indoor pool, Jacuzzi, steam and sauna room, beauty salon, spa and event space.

- Hilton launched a DoubleTree hotel in Heyuan, China, in December. It is the first international brand to open a hotel in the South China city. The 427-room hotel has three restaurants, an indoor swimming pool, a 24-hour fitness center and free Wi-Fi in all public areas. The hotel also has a 24-hour business center and more than 13,000 square feet of meeting and event space, including 18 function rooms.

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