LI, Tao @ Hong Kong

Wyndham Hotel Group, which claims to be the world’s largest hotel company operating 15 diverse hotel brands, plans to continue expansion on the mainland to tap the growth of new travelers from both domestically and from abroad.

Ken Greene, president and managing director, Asia Pacific of Wyndham Hotel Group, said although the lackluster global economy may haunt the hotel sectors, Wyndham’s ambitious mainland expansion plan will remain unchanged, driven by the government’s effort in infrastructure development as well as the booming growth of both the inbound and domestic travelers.

“Our chairman made a statement earlier that we are aiming to develop as many properties on the Chinese mainland as we have in the United States, although our group currently operates about 6,200 hotels in the US and only around 400 on the mainland,” Greene told China Daily.

“We do not have a timetable to achieve this target, but our presence on the mainland will definitely double in five years,” he added.

Wyndham Hotel Group, which operates 15 hotel brands including the flagship Wyndham, Ramada, Howard Johnson, Days Inn and Super 8, opened 141 new hotels in the Asia Pacific region in the last 12 months as of Sept 30, 2011, with 131 of them on the Chinese mainland.

Super 8, its largest brand on the mainland, competes with other domestic budget economy hotels, including the US-listed 7 Days Inns and Home Inns & Hotels, which has seen the fastest growth. In the third quarter of 2011 alone, 36 more Super 8 hotels were opened on the mainland, bringing the total number to 275.

Greene said the mainland continues to be the most important growth engine for the company as its domestic market. With a population of 1.3 billion people, China is mature in the travel sector, where ordinary people are also willing to spend a couple of nights in hotels like those in the developed economies.

Greene is confident that Wyndham and its sub-brands will also attract foreign travelers benefiting its heavy exposure abroad, along with the boom of inbound travel on the mainland.

The mainland reported further strong growth in its domestic and outbound tourism sector during the first three quarters of 2011, China Tourism Academy (CTA) said in mid-October. The total number of trips in the first three quarters reached 2.08 billion, an increase of 12 percent over the same period in 2010.

However, in contrast with the booming outbound tourism which has become a lucrative business as enormous numbers of Chinese heavy spenders went abroad, inbound tourism growth to the territory is still lagging behind, CTA noted.

The mainland’s hotel market is also expected to overtake the US market to become the world’s largest in 2025, according to a report issued by InterContinental Hotels Group (IHG). It estimates the territory will have 6.1 million hotel rooms by that time, on par with that in the US, China Daily reported last month.

In the meantime, almost four out of 10 hotel rooms on the mainland are currently empty this year due to low demand after the rapid expansion of international hotel chains, including Hilton Worldwide and Hyatt Hotels, according to data provided by STR Global.

It indicated that the mainland’s occupancy rate stood at merely 61 percent in the first nine months of 2011, compared with the same period a year earlier, and the lowest in Asia after India among 15 economies tracked by STR Global.

Shanghai, in particular, recorded only filling up about half of the hotel rooms, compared with more than 80 percent for Singapore and Hong Kong, according to the hotel data provider.

Greene said that while the group’s two flagship-brand Wyndham hotels in Shanghai have a low occupancy rate, the rest of the group’s brands, especially the lower-end Super 8, were making quite a fortune at the moment.

The managing director is also not perturbed with the company’s cash flow despite the gloomy global economy which is expected to have adverse affects on the travel and hotel sector inevitably, as Wyndham operates most of its hotels via franchise agreements.

“We have a lot of cash in hand and we need to find ways to spend it,” Greene said, adding these high-end hotel brands may encounter temporary difficulties but the rest of the brands will still survive as demand is still buoyant, particularly in economies like the Chinese mainland.

A Deloitte survey released on Nov 16 showed that the hospitality sector remains robust despite ongoing European economic turmoil, as over half of the senior hospitality industry executives surveyed by the accounting firm said their current situation is better than expected and they will continue to invest in luxury hotel assets despite the mixed outlook for 2012.

litao@chinadailyhk.com
http://www.chinadaily.com.cn/hkedition/2011-12/24/content_14321564.htm