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Hoteliers expect immediate rebound in autumn

By Liu Jie (China Daily)
Updated: 2008-08-25 17:44

Poly Plaza General Manager Li Wei says he's relieved because the occupancy rate of his four-star hotel was over 95 percent during the Beijing Olympics period. However, Li Yukai, northern China general manager of the Jinjiang Star budget hotel was glum about his hotel's unsatisfactory performance in August.

But both are optimistic about the post-Games hospitality market in Beijing and expect an immediate rebound in the autumn.

Though hotel operators have been expected to enjoy a bonanza during the Olympic Games, conditions varied for different companies. Most of the high-end hotels, which had contracts with Olympic authorities, are quite happy, while the three- and four-star facilities were just "so-so", and the budget inns were rather frustrated.

Sources from the Beijing Tourism Bureau reveal that by July 12, about 78 percent of rooms at five-star hotels in the Olympic city were booked, at an average rate of 3,464 yuan ($505.80) per night, 3.6 times higher than a year earlier.

At four-star hotels, 48.5 percent of rooms were reserved, at an average rate of 2,185 yuan per night, 4.6 times higher than a year earlier. Lower-ranked hotels had lower reservation rates.

Among all the star-ranked hotels in the capital, 119 signed contracts with the Olympics authorities and most of the contracted hotels were five-star facilities. Xiong Yumei, the Beijing Tourism Bureau's vice-director and also the bureau's spokeswoman, says most of them were largely booked up.

At Olympic-contracted Poly 200 of its 292 rooms were booked by the BOCOG for journalists from the United States and Europe with a rate at 2,160 yuan per night, about three times the rate of ordinary days. The remaining 92 rooms were sold smoothly at a unit price of over 4,300 yuan.

The Shanghai-based budget hotel chain Jinjiang Star has nine outlets in Beijing, with an average occupancy rate at around 40 percent during the Games, much higher than the average level of budget hotels in Beijing, and largely due to its brand and sales promotions.

Zhang Huiguang, director with the Beijing Tourism Bureau, says the hotel glut was partially due to high expectations about the Olympic demands.

Beijing boasts 162 four- and five-star hotels, compared with 64 in 2001, when China won the bid for the Games.

Zhang also says that the stricter tourist and business visa regulations imposed by the Chinese government since April for "safety and security" reasons, and worries over the May 12 Sichuan earthquake were other reasons for lower occupancy rates at the budget hotels.

In addition, increased travel and lodging rates thwart travel enthusiasm for price-sensitive domestic tourists and affected the budget sector as a result.

Poly Plaza's Li says the post-Olympic rebound will likely be due to domestic travelers after the Games who are taking advantage of lower costs to enjoy the week-long National Day October 1 holiday. "For overseas tourists, the Olympic Games can be regarded as an unprecedented advertisement for China and Beijing, which lured them, especially foreigners who had old images of China in their minds and want to see what the country and the city really are like now," he says.

More than 30 hotels, including at least 13 five-stars, were opened last month or are still under construction now. A Mandarin Oriental, located at the foot of the new China Central Television (CCTV) tower, just opened. And the newly established boutique Opposite House has 99 rooms, complete with deep-soaking oak bathtubs and published rates that start at $732, double those of many of the city's most expensive hotels.

Multinational luxury hotel brand Hilton opened its third facility in Beijing on July 18. Located in Wangfujing, the capital city's must-see commercial area, the hotel targets families and individual travelers.

According to Nils-Arne Schroeder, general manager of Hilton Beijing Wangfujing, the establishment of the new facility was not due to the Beijing 2008 Olympic Games and the hotel did not make special preparations for the international event.

Shanghai-based market researcher China Market Research Group estimates the Beijing hotel industry is growing by 20 percent to 25 percent a year in terms of revenue and 12 percent to 15 percent in terms of number of visitors.

By contrast, the number of luxury hotels opening in the city has grown at an average rate of 40 percent a year, according to the Beijing Tourism Bureau.