Accor will build about a third of its 100 planned Chinese hotels in tourist destinations as rising wealth in the country leads to growing leisure travel and oversupply in cities depresses room tariffs.
Domestic tourism in the country is “growing at a rate of knots,” Michael Issenberg, chairman of Accor Asia-Pacific region, said in a May 22 interview in Sydney. That’s making tourist spots more attractive than many urban sites, he said.
“If people acquire wealth, they want to travel,” Issenberg said. “That’s been the big change. Even five years ago, it was all cities.”
Europe’s largest hotel operator has already opened sites on ski slopes near the North Korean border, a beach resort on tropical Hainan island, and a central Chinese forest park among its 128 hotels in the country. That will help it capitalize on domestic tourist trips that are forecast to grow by about 11 percent a year between 2013 and 2018, according to data from Euromonitor International.
Other international leisure companies are also targeting China’s domestic tourist market. Carnival Corp. will dispatch a fourth cruise ship for the country next April and Walt Disney Co. plans to open a $5.5 billion theme park resort in Shanghai during 2015.
Hennes & Mauritz AB, the Swedish fashion chain, has opened a store in Zhangjiajie, which serves central Hunan province’s scenic Wulingyuan national park. The town is also home to an Accor Pullman hotel.
Largest maket
China overtook Germany in 2012 to become the largest outbound tourism market, according to the United Nations World Tourism Organization. International spending by Chinese travelers rose 26 percent during 2013 to $129 billion, the agency said May 14.
Expansion by domestic and international companies in China has slowed some hotel operators’ ability to increase room rates.
At InterContinental Hotels Group (IHG) revenue per available room in Greater China rose just 0.7 percent from a year earlier in the third quarter of 2013, according to company filings.
Hotels in the densely populated east of China filled ng April. That compares with occupancy rates of about 70 percent in Accor’s economy hotels globally and 68 percent in its upper- and mid-market locations during 2013, according to a company presentation in January.
