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Number of hotel rooms set to soar

Updated: 2011-11-08 09:50

By Yang Yijun (China Daily)

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 Number of hotel rooms set to soar

A hotel bellboy serving customers at a hotel in Nanjing, capital of East China's Jiangsu province. [Photo / China Daily]

But some observers raise concerns about an oversupply in the domestic market

SHANGHAI - China's hotel market is expected to overtake the United States to be the world's largest from 2025, according to a report issued by InterContinental Hotels Group (IHG), the largest hotel company in the world by number of rooms.

It is estimated China will have 6.1 million hotel rooms by 2025, the same as the United States by then. By 2039, the number of China's hotel rooms will reach 9.1 million, four times of the size it is today, said the report, which was based on the figures from the National Bureau of Statistics in China and the United Nations World Travel Organization.

In 2009, the State Council added tourism as another pillar industry in the 12th Five-Year Plan (2011-2015), which is widely believed to be the major factor that propels the country's hotel industry.

According to the Opinions of the State Council on Accelerating the Development of Tourism Industry released in 2009, tourism will contribute 4.5 percent to China's gross domestic product by 2015 and revenue will grow by 12 percent annually.

A report released by the Boston Consulting Group this year predicts that China will surpass Japan to become the world's second largest tourist market by 2013, holding 8 percent of the global tourist market share.

China National Tourism Administration also expects the number of inbound travelers to reach 3.3 billion by 2015.

A rapidly emerging group of upper-middle class is another crucial driver of the country's hotel market.

McKinsey Insights China and statistics from the US Census Bureau showed that in less than 15 years China's wealthy and upper-middle class combined will be twice the size of its US counterparts.

"Many of China's biggest cities already have as many wealthy consumers as major US ones. This is leading to a dramatically increasing demand for leisure travel. Affluent consumers are increasingly willing to spend on luxury experiences and not just on luxury goods," said Keith Barr, chief executive officer of IHG Greater China.

"Compared with their counterparts in the West, Chinese consumers prefer famous brands, which signal quality in their eyes," he added.

Major international hotel chains are planning a big expansion in China by opening hotels not only in first-tier cities, but also second- and third-tier cities.

IHG, which currently manages 154 properties in China, has 142 in the development pipeline, the largest in China and a quarter of the company's total globally.

Hilton Worldwide said it will have 100 hotels in China by 2014, four times the number of properties it manages in the country now. China will then become its second largest market, after the US.

Starwood Hotels and Resorts with 70 existing hotels in China has more than 90 new hotels in development.

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