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Lecture # 3 Tourism Management: Hotels. Lecture Objectives Understand hotel development in China Review w orld hotel development and its influence on China’s hotel business Case analysis of economy hotel development in China Discuss tourism’s influence on China’s modernization

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Lecture #3Tourism Management: Hotels

Lecture Objectives

  • Understand hotel development in China

    • Review world hotel development and its influence on China’s hotel business

    • Case analysis of economy hotel development in China

  • Discuss tourism’s influence on China’s modernization

    • Discuss to what extent tourism will make an authentic modern China (Discussion of authenticity #2)

Useful References

Yu, L. (2003). Critical issues in China’s hotel industry. In Yu, L., Ap, J. & Zhang, G. (Eds.), Tourism in China, pp. 129-142. New York: The Haworth Hospitality Press



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Development of tourism infrastructures in ChinaYour independent reading of the textbook chapters, giving critical thoughts to:

Achievements and future issues*

  • Hotels

    • Service improvement, management consolidation, and brand development

    • Strategies of global hotel companies to enter China

    • Financial performance of hotels

*To have the information updates, please visit:

http://www.cnta.com


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Review world hotel development &its influence on China’s hotel business

  • Western hotel chains and their hotel brands

    • The global hotel industry is dominated by hotel chains.

    • A third (over 5 million) of world hotel rooms were controlled by the top 300 hotel chains

    • 2.7 million hotel rooms were controlled by the top ten hotel chains


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Geographic Location of World Top 100 Hotel Companies, 2007

Source: Compiled based on data from Hotels Magazine, “Hotels’ 325”


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Hotel Company in Most Countries

Source: Hotels Magazine, “Hotels’ 325”


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Three hotel industry business formats

  • Management contracting;

  • Franchising;

  • Consortia


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Case analysis of economy hotel development in China

  • Economy hotel, also known as limited service hotel

    • Low price RMB180-220

    • Operation model – b&b

    • First came up in US in 1950s

    • Global ratio to star hotel is: 7 : 3

    • In China such hotels only take up less than 10% of the market share

    • 3 well known brand economy hotels

      in China enjoy an annual growth of

      90% in the past 3 years:

      • Jinjiang Inn (锦江之星)

      • Home Inn (如家快捷)

      • Motel 168 / 268


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EH in Hangzhou

  • First built in 2003 (Home Inn Tiyuchang Road)

  • By 2008, 8 economy hotel chains had opened business in the city

    • Home Inn has 16 in HZ at present

  • Occupancy rate stands at a regular rate of 95% and frequently reaches 100%

  • Problems caused by overexpansion of economy hotels in Hangzhou


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Major problems

  • Overheated investment pushes up construction cost – multiplied cost such as

    • Building renting

    • Management

    • Labor

    • etc. => profitability

  • Competition with 2-3 star hotels in

    • Service

    • Price


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  • Inadequate management capabilities

    • Weak in marketing, mainly depending on “C-trip”

    • Lack of established quality standards and quality guarantee system

    • Human resource problems

      • 11% untrained urban reemployment people

      • 19% untrained rural migrant workers

      • Attractiveness to professionally trained hotel management graduates

  • Indistinctive product design

    • Homogenization => attractiveness to tourists

  • Insufficient government supporting policies

    Economy hotel should not mean “cheap hotel” only!



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Tourism as a driving force of China’s modernization campaign: the false modern

China =拆啦!

Is there an authentic modern China in the making?



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Key questions associated with China’s outbound travel: campaign:

  • Direct result of the false modern?

    • Strong and rapid economic growth =>

    • China becomes one of the world major outbound market =>

    • Chinese tourists’ behaviour – individual manifestation of a false modern society?

  • Potential transformation towards an authentic modern with the help of tourism to increasingly open China?

    • Right and opportunity to travel: individuality and freedom =>

    • Exposure to different values, cultures, and ideas =>

    • Travel as a learning experience,could tourism development be the soil for an authentic modern China to grow?


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