Marriott to Double Number of Hotels in China as Tourism Grows
Marriott International Inc. (MAR), the largest publicly traded U.S. hotel chain, plans to double the number of hotels in China by 2014 to meet growing demand in the world’s third-largest tourism destination.
Marriott, whose brands include Ritz-Carlton and Courtyard, will open about 50 hotels in China, where it currently has 58 in its biggest market after the U.S., Asia-Pacific Chief Operations Officer Craig Smith said in an interview in Shanghai yesterday.
“China is big for us,” Smith said. “This is a vibrant part of the world. Part of our job is to make sure that we develop our plans to capitalize on the growth here.”
Marriott is expanding even as China’s economic growth slowed to almost a three-year low of 8.1 percent in the first quarter. The number of internationally branded hotel rooms in China is expected to surge 52 percent by 2013 after rising 62 percent in the past five years, according to Jones Lang LaSalle Hotels, which tracks data in 30 Chinese cities.
“The economy of Asia is really led by the power house in China,” Smith said. “It’s going to continue to grow.”
Marriott, based in Bethesda, Maryland, began operation in Asia in 1989 and manages about 134 hotels in the region. It plans to increase the number to 150 by the end of the year, led by openings in China and India, according to Smith.
The company, which opened a 342-room Renaissance hotel this week in Huizhou of southern Guangdong province, is not concerned about occupancy rates and over supply in China’s less affluent second-and-third tier cities, Smith said.
“In those cities, it happens sometimes that people knock on our door and say I want a 600-room hotel or a Ritz-Carlton,” he said. “We go back and say you don’t need that. You’ll tell the owners the truth at front and make sure they have the right brand.”
Marriott, managing all their hotels in China, expects demand will outweigh the supply in the long run in the second- and-third tier cities, so long as they are in the right locations and have branding power, Smith said.
China is the world’s third-largest tourism destination, according to the World Tourism Organization.
Starwood Hotels & Resorts Worldwide Inc. (HOT) expects China resort business to provide growth in the next 10 to 15 years, Chief Executive Officer Frits van Paasschen said in an interview last week. InterContinental Hotels Group Plc (IHG), owner of the Holiday Inn brand, will begin opening locations as soon as next year under a new brand designed to appeal to Chinese travelers, Chief Executive Officer Richard Solomons said in an interview last month.
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