China Hotel and lodging industry booming

China is becoming the world’s top tourist destination in the next decade. Moreover, the Beijing Olympic 2008 has brought a bright future for the hotel industry. China is the most attractive place in the world right now for hotels. That's why investment capital is racing there and why the major international brands are racing there too. Indeed, 188 new hotels are under construction in China, and 145 of them are 4 or 5-star offerings with more than 200 rooms. Even if some of these projects aren't completed, this building spree could bring as many as 30,000 new rooms to China at a cost of more than $8 billion.
Heady projections about the future of China's travel industry also help to explain this frenzy of hotel building. Already the world's fourth most popular tourist destination, the country is expected to move into second position within a decade, according to the World Tourism Association. By 2020, China is forecast to overtake the U.S. as the world's most-visited country, pulling in some 130 million visitors a year. China's burgeoning domestic-tourism market is also critical in the bullish calculations of hotel companies. By 2010, the number of domestic tourists is forecast to soar from 1.2 billion to about 1.8 billion.
UK based company InterContinental currently runs 54 hotels there, mostly under the Holiday Inn marque, and it plans to triple that figure by the end of 2008. Appropriately, Holiday Inn rose to prominence amid another boom, profiting from extensive highway construction across the U.S. after World War II. The chain started with four hotels in Memphis in 1952, expanding to about 1,000 by 1968.
It may be a decade before business really starts to boom in some of the secondary cities now being targeted—metropolises like Hefei, Harbin and Chengdu. But early movers such as InterContinental hope to reap the benefits of choice locations and greater brand awareness by getting there first.
China also has the fastest-growing inbound tourist flows of any country and is projected to be the largest tourist destination in the world by 2020. China is in a terrific hurry to modernize and possesses an intense desire to build world-class accommodations for the 2008 Olympic Games and for a series of important worldwide exhibitions already scheduled. Lodging development in China is lead by three cities with some of the most dynamic Development Pipelines anywhere.
Beijing, which will host the Olympic Games in 2008, has 25 hotels in the Pipeline. All but seven are of 4 or 5-star quality. 14 are already Under Construction. Recent statements from Chinese officials indicate a need for another 65 hotels of various star ratings for the Olympics.
Shanghai, anxious to be once again viewed as the world-class financial center. It was at the turn of the last century has 24 projects in the Pipeline, 14 of which are Under Construction. All but five will be 4 or 5-star operations.The Pudong District on the east side of the Huangpu River, has been sprouting world-class hotels in the last three years and will continue to do so through the end of the decade.