Accor, Europe’s largest hotel operator, says it will build about a third of its 100 planned hotels in China mainland in tourist destinations as rising wealth leads to growing leisure travel and oversupply in cities depresses room tariffs.
“Domestic tourism on the mainland was growing at a rate of knots. That was making tourist spots more attractive than many urban sites. If people acquire wealth, they want to travel. That’s been the big change. Even five years ago, it was all cities.” Michael Issenberg, Accor’s Asia-Pacific chairman said last week.
The French hotel giant has already opened sites on ski slopes near the North Korean border, a beach resort on tropical Hainan island and a central Chinese forest park among its 128 mainland hotels. That will help it capitalize on domestic tourist trips that are forecast to grow by about 11 per cent a year in the next four years, according to data from Euromonitor International.
Other international leisure companies are also targeting mainland tourist spots: Swedish fashion chain Hennes & Mauritz has opened a store in Zhangjiajie, which serves central Hunan province’s scenic Wulingyuan national park. The town is also home to an Accor Pullman hotel.
China overtook Germany in 2012 to become the largest outbound tourism market, according to the United Nations World Tourism Organisation. International spending by Chinese travellers rose 26 per cent last year to US$129 billion, the agency said this month.
Expansion by domestic and international companies on the mainland has slowed some hotel operators’ ability to increase room rates. InterContinental Hotels’ revenue per available room in China rose just 0.7 per cent year on year in the third quarter of last year, according to company filings.
“The oversupply can be chronic if things keep getting built, but if the supply even starts to moderate, demand will catch up,” Issenberg said.