Demand for China Traveler is Domestic: Sangster

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Feb. 18 (Bloomberg) -- Andrew Sangster, Editor at Hotel Analyst, discusses InterContinental’s earnings and overall hotel investment in emerging markets. He speaks on Bloomberg Television’s “The Pulse.” (Source: Bloomberg)

Emerging-market.

Does it make more sense to go after known places or does it make more sense going after emerging markets where there is still a demand in five to 10 years.

I think richard solomons spoke to that very well.

You're not going in there for a quick flip.

The tailwind is fantastic right now.

It has a hockey stick affect in terms of demand, travel, and tourism.

Many of these emerging markets see an increase of the number of those households.

China is about a million households at 25 k or more points.

You go from one million to 200 million, you can see that will -- see what that will do for demand.

The question is -- is the new chinese torus class, will they be coming to europe hotels, and what is your take on w opening up at altitude?

Will this be successful?

It is a risk.

It is a risk more for the owner of the hotel rather than starwood, coming in as a manager.

Where's the demand going to be in terms of chinese travelers?

It will be domestic initially and then the countries around.

We are seeing a huge volume coming into europe.

It is going to be spread across the piece, but the biggest bulk of that is going to be domestic demand.

Companies like intercontinental, that is their biggest growth market right now.

Very soon, china will be a lot bigger than the u.s., in terms of the number of hotels.

A former chief executive was saying they wanted to replicate what they did in the 50's with route 66 in china.

What we understand is that the government can -- the big hotels.

Can you open a hotel in the city?

You lose a little bit of tactical management.

How worried about this are you?

There will be local risk.

There has to be political risk.

The back to the initial point, you're in it for the long haul.

You are balancing the short-term political risk.

It is a potential, longer-term gains in play.

If you look at what is happening, you are right about the infrastructure being put in place in china.

We know the numbers in terms of the bullet trains going in, the roads going in, their ports going in.

That creates huge amounts of the man.

-- of demand.

The same thing is going to happen in china with the airports, the motorways, and the rail infrastructure.

Is there one hotel company getting it better than the others?

Where they have very high and, in the medium, or you go for your your luxury.

There are some dedicated and focused luxury players.

Four seasons as the best-known.

In terms of where the big cash is going to be, it is at the economy level.

That is where it is your holiday in zen below, or the cash is going to be and where the bigger returns are going to be.

If you look at the global players, what they have done is go into emerging markets and establish an upscale brand and then they filter out with the smaller brands.

If you have the desirable one, the faerie dust filters off to the lower brands.

It is risky.

You are not going to do that for a holiday inn express.

Thank you for that.

Andrew sangster.

Hans nichols as well.

We are back in a couple minutes.

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This text has been automatically generated. It may not be 100% accurate.

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