TEDA CEO to Present Overview on Trends in Hotel, Tourism Development in China

Travel News Asia Tuesday, 27 March 2007

Dr. Tim Gao, Chief Executive Officer of Beijing-based TEDA Hotels Management Company and an expert on Chinas rapidly expanding hotel and tourism market, will be sharing his knowledge as a featured speaker at the Seminar on China Hotel & Tourism Development, to be held at New Yorks Le Parker Meridien April 27.

The first-ever U.S. event is being co-sponsored by The Hong Kong Polytechnic Universitys School of Hotel & Tourism Management and Hotel Online.

In a presentation entitled The Development Trend in Chinas Hotel and Tourism Industry, Dr. Gao will focus on why the hotel marketplace in China is expanding so rapidly, what kinds of properties are needed there, and which regions of China offer the most significant development opportunities.

Inbound and outbound tourism has increased by double digits over the few years, and as a result there is a similarly growing need for developing local hotel brands and chains into regional ones and even global ones in China, Dr. Gao says. As such, China desperately needs expertise in global brand and chain management. It is my opinion that American hotel chains and brands may well see this scenario as a significant opportunity to extend their presence into China through property and asset exchange, co-branding or brand acquisition.

Dr. Gao will talk about the fact that because profit margins in China's independent hotels have been considerably lower than those of their counterparts that carry well-known chain or brand names, there is an ever increasing demand for:

Horizontal integration - the forming or joining together of management companies;
Vertical integration - consolidating with online or offline suppliers and travel distributors;
Related diversification - merging with real estates developers or public transportation companies to bring economy of scale or scope to hotels.

Most of the Chinese chains or brands have developed by way of property or asset acquisition - compared to most American chains or brands which have developed through brand-identity affiliation - and therefore there is a strong call for virtual alliance through Internet-based management-service providers, Dr. Gao explained. American hotel chains or brands may resort to virtual alliance tactics to further increase their presence in China and elsewhere.

Dr. Gao also will discuss segment opportunities for U.S. hotel developers and franchisors - and there is no shortage of these opportunities in various China markets.

Four-star and above hotels are now managed by international hotel chains, while most of the two-star and below hotels are managed by local chains, he said. Thus, there is an urgent need for developing the mid-scale and the limited-service market, especially in the well-developed coastal areas, where business travel is booming.

In my opinion, it is high time now for the American hotel brands - such as Hilton, for example - to enter the midscale hotel market in the coastal areas and the full-service hotel markets in the inland areas, which are still very attractive to international travelers, Dr. Gao added.

The registration fee for the Seminar on China Hotel & Tourism Development is US$1,000 per person. For registration of three or more person from the same organization, the registration fee is US$500 per person. The fee covers the full day program, one lunch and two coffee breaks.

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