Asia’s international hotel boom
A suite at the Hilton Guangzhou Tianhe in China.
A few years ago, an executive traveller from China, India or Indonesia would probably never have heard of some of the world’s biggest international hotel brands, such as InterContinental, Hilton or Marriott. Today, one is probably opening in their hometown.
Due to booming domestic demand, the Asia-Pacific region is seeing a mushrooming in hotels from international and regional chains. Hilton, for example, plans to grow to 300 hotels in the region over the next six years. Starwood Hotels, which includes the Westin and Sheraton brands, will open 50 new properties in Asia this year, which accounts for nearly 60% of the company’s development in 2012. And in India, Marriott is expanding from 11 to 100 hotels in the next five years.
“By the end of 2013 we'll have more hotels on China’s Hainan Island than in the [US’s] Hawaiian Islands,” said Matt Fry, Starwood’s senior vice president of development in Asia.
According to the United Nations World Travel Organisation, China's hotel market will overtake the US’s as the world's largest by 2025, with around six million hotel rooms -- and almost double it by 2039.
“The supply of hotel rooms in Asia is still way below North American and European levels,” explained Fry. So the region is playing catch up -- and not just in China and India. New hotels are springing up in a variety of destinations, such as Baku, Colombo and Dhaka. Markets like South Korea and Indonesia are also booming.
“As these markets further mature, our global network will benefit from a strong domestic presence in the countries that are destined to become major outbound markets,” said Gaurav Bhushan, chief investment officer at the Accor Asia Pacific hotel group.
The hotel giants are hoping that the Texan oil worker visiting Daqing, China’s largest oil field, will notice the Sheraton logo as he pulls into the northern Heilongjiang province city. And when his Chinese counterpart returns the visit, he will notice the same in Houston. The hotels are sowing the seeds today for their future success tomorrow, by taking these brands into the very Asian towns and cities that will spawn a future generation of travellers.
With more properties in Asia springing up, competition has also increased among domestic brands, forcing hotels to step up their game.“In economy hotels in India you now see higher levels of service, more facilities and food and beverage outlets that would normally be seen in upscale hotels elsewhere in the world,” said Bhushan.
On the downside, if you’re staying at a newly opened global brand hotel, you may have to excuse the erratic service. Working at an international hotel often is the starting ground for many young, bright hotel employees who are later coveted by other service industries, such as airlines, banks and domestic hotel brands, after their initial training.“They all view experience in international hotel brands as a major asset and this is placing stresses on the hotel business in many Asian markets,” explained Bhushan.