Best Western China CEO William Dong said the hotel company plans to open 13 hotels now through the end of 2015 in second- and third-tier Chinese cities, as leisure travelers have become the hotel chain's primary customer. Currently it has 39 hotels in China.
He said Chinese travelers are becoming more adventurous and eschewing the no-frills group tours that are a common sight in many parts of the country. "It's not like before, all those domestic travelers in groups with one flag taking a picture and then running away to another place," Mr. Dong said.
"Families stay for three days or even one week."
Closely held Best Western is one of many Western chains trying to gain footing in China in the budget-hotel sector. Accor, whose brands include Novotel and Ibis, is building one-third of its hotels planned in China around the country's tourist destinations. InterContinental Hotels Group, which includes the Holiday Inn brand, is constructing 30% of its globally planned hotel rooms in China over the next five years.
They are focusing on an increasingly affluent class of Chinese travelers who want to avoid the skinny mattresses, iffy hygiene and sheer unpredictability of many hotels in mainland China.
"There are Home Inns everywhere and inside the rooms are all the same," said Sofia Wang, a 28-year-old former manager at a Chinese school, explaining her preference for a chain run by U.S.-listed Home Inns & Hotels Management Inc. of Shanghai. She said she takes two to three leisure trips each year looks to pay between 180 and 280 yuan a night (US$29 to US$45).
Best Western and others expect budget hotels to grow from their current 20% share of the Chinese hotel market. "In the upscale market you've got 800 hotels in the pipeline through China, but you've got an equal number at the economy level that are now being developed," said Ron Pohl, senior vice president of brand-management and member services at Best Western International. "That's a pretty significant shift."
While the overall average daily hotel rate in China hits 599.64 yuan, according to STR Global, economy-level hotel rates are significantly cheaper. In the first quarter of 2014, average room rates for three-star hotels were 206.22 yuan, down from 220.2 yuan a year earlier, according to the Chinese national statistical bulletin of star-rated hotels.
Best Western, which classifies itself primarily as an economy to midlevel brand, charges around 337 yuan a night for a room with one queen bed in Tianjin, in northern city China.
But Western hotel brands face competition from domestic chains. A recent study by travel research firm PhoCusWright found that 20% of 3,277 Chinese leisure domestic travelers said they would book only Chinese brand hotels, while 28% said they preferred domestic hotel brands. Another 28% of respondents said they considered foreign and Chinese brands equally and 20% said they didn't pay attention to brand nationality.
Chinese President Xi Jinping's anticorruption campaign introduced a growing list of antiwaste and anticorruption regulations aiming to crimp the use of public funds on items ranging from luxury travel and meals to calendars. It has discouraged government business from being done at five-star hotels, which is a boon to Best Western and other economy-level hotels, Mr. Dong said. He said Best Western has altered some of its designs to focus less on entertainment and business spaces, increasing the number of rooms by as much as 50% and making conference spaces multifunctional with partitioned walls.
Hotels "used to have huge rooms, funny decorations and gold panels," Mr. Dong said. "Now people probably pay more attention to hygiene, to cleanliness, to things like Wi-Fi and lighting."
One of the biggest challenges for Best Western China, like many hotel chains here, are factors out of its control. Funding from the government changes year to year, which causes projects to get tied up in finance and the approval processes can take months. Best Western's hotel in Liaocheng in Shandong province, for example, was completed five months ago, but still doesn't have an opening date because it is waiting for fire approval, Mr. Dong said.
Source: Wall Street Journal by Alyssa Abkowitz
from China Travel & Tourism News http://ift.tt/1iB6EFm
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