Will there be a hotel room glut in China? Have your say
QUICKVOTE
YOUR E-MAIL ALERTS
(CNN) -- All the signs look good for China's travel market.
Tourist and business arrivals are up and are predicted to rise more, Asia's low cost airlines are starting to fly and Beijing is gearing up for the 2008 Olympics.
And in a CNN.com poll, 78 percent of 515 voters said business travel to China would increase a lot in the next five years.
With an eye on future demand, droves of hoteliers are clambering for a foothold in the Middle Kingdom -- not just in Beijing, Shanghai and Guangzhou but in secondary destinations as well.
Already, big cities from Xiamen to Chengdu are in the middle of a hotel construction boom, with hundreds of new accommodation blocks being erected.
"We believe that China is developing dramatically and will do so in the next 20 years, so we want to be part of it," Bernd Chorengel of Hyatt International Corp. told CNN.
Recent deregulation of ownership has helped. Now overseas corporations can own their hotels outright instead of engaging local partners.
Competition rising
Beijing already has 600 star-graded hotels and Olympic organizers want to add another 200 by 2008. A number of existing hotels are also undergoing major makeovers to keep ahead of the game.
"There is a lot of competition that is coming in and we need to make sure our product (and) our hardware matches the needs of the guests," says Vlad Reyes, Hilton's general manager in Beijing.
The World Travel and Tourism Council predicts China will be the most visited country on the planet by 2020 and that business travel will rise by nine percent year-on-year between 2005 and 2014 -- second only to Libya.
The InterContinental Group, which runs Holiday Inns and has 41 hotels in China, plans to at least double that number in the next few years.
"They (the Chinese) are building 48 airports as we speak," Patrick Imbardelli, the chain's Asia Pacific director, told a Hong Kong hotel investment conference last year.
Shangri-La Hotels and Resorts has also been building. Out of its 8,000 rooms, roughly 40 percent are now in China and eight more hotels are in the pipeline.
One of the world's largest hotel marketing companies, SRS-WorldHotels, intends to incorporate up to 50 new hotels into its Chinese portfolio within the next few years.
Yet the calculated gamble on growth in China has got some market analysts wondering whether a glut could be on the cards -- especially in Beijing after everyone goes home from the Olympics.
Hotel room rates in the Olympic 2000 city of Sydney have yet to recover, according to The Australian newspaper. A rash of new hotels built for the Olympic boom left the city's hotel market oversupplied.
