Marriott Plans Asia Expansion

BEIJING—Marriott International Inc. plans to double its hotel outlets in Asia, expanding most in China despite already considerable capacity increases and falling occupancy rates there. The company said it plans to have 260 hotels open in Asia by 2016, expanding its China-based hotels to about 125 from 60 and covering nearly 75% of Chinese provinces. Hotels in the pipeline will range from Marriott's luxury Ritz-Carlton and JW Marriott brands to its Marriott resorts and lower-end Courtyard brand. Marriott's expansion is an attempt to attract the growing number of Chinese tourists who are traveling at home and abroad. In the first week of October, a peak travel period each year due to China's national holidays, national tourist sites recorded 34.2 million tourists this year, an increase of 21%, from the year earlier, according to China's National Tourism Administration. Despite the growth in travelers, China is facing a hotel glut as the world's largest hotel companies have been expanding rapidly across the country. Hilton Worldwide Inc. has 110 hotels in its pipeline, adding to its existing 31. InterContinental Hotels Group PLC expects to add 150 hotels in upcoming years, adding to the 172 it already operates in China. Of the 1,600 hotels planned for the Asia-Pacific region in the next five years, nearly 60% will be in China, according to hotel market research firm STR Global, which said occupancy rates have declined in China, falling to 61.3% in September from 62.9% in the same period a year earlier, outpacing a broader regional drop. Executives at Marriott are betting that the travel demand will continue to grow, eventually filling supply. "There aren't that many hotels given the pace of growth and the expectations of future growth," said Simon Cooper, Marriott International's president and managing director in Asia. "We're bullish on Asia and particularly in China," Mr. Cooper said, noting that in smaller, less populated cities in the U.S., Marriott's hotels already surpass the existing number in China. The company won't follow a recent trend of China-specific hotel launches, but will instead aim to bring room rates down in 2013 in China's lower-tier cities to meet demand for the flagship Marriott hotel brand, Mr. Cooper said. In China's smaller cities, the average rate for a one-night stay in a Marriott is about $130, Mr. Cooper said, declining to disclose specific details of future pricing plans. Outside of China, 61 hotels will be added to the India pipeline and the 83 others will be built in countries such as Japan, Indonesia, Vietnam, Malaysia and Australia. The expansion adds to a plan Marriott announced in June to invest $2 billion over the next three years to open new hotels globally, expanding to 100 countries from 70. The company said then it would invest an additional $600 million to renovate existing locations and update technology. from China Travel & Tourism News http://www.chinatraveltourismnews.com/

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