“Luxury hotels in Tibet target wealthy Chinese”

Luxury hotels in Tibet target wealthy Chinese

Posted: 29 Nov 2010 12:06 AM PST

Expansion in China, the world's fastest-growing economy, is causing an urban lodging glut that's spurring luxury chains including Starwood Hotels & Resorts Worldwide's St. Regis to head to areas as remote as Tibet.

The 162-room St. Regis Lhasa Resort, which opened this month as the first international luxury hotel in Tibet's capital, is about 12,000 feet above sea level and boasts a five-star spa. Shangri-La Asia will open a 350-room hotel in Lhasa in 2012, and InterContinental Hotels Group plans to add a high-end, 2,000-room hotel in the city within three years.

The surge of hotel development in China has led to an oversupply, particularly in cities, and it may take five years for demand to catch up, said Jonas Ogren, a Singapore-based director for STR Global, an industry research company. That's made Tibet and other regions far from Beijing and Shanghai more attractive.

"While Tibet isn't necessarily the first location that comes to mind for a hotel, these companies usually already have properties in primary and secondary cities," Ogren said. "So more are looking to smaller markets or resort-type places."

Hotel occupancies in China climbed to 60 percent this year through September from 51 percent a year earlier, according to STR Global.

In Tibet, ruled as an autonomous region in the People's Republic of China, tourism has surged since the opening of the Qinghai-Tibet Railway four years ago, largely driven by domestic demand. A total of 5.56 million tourists visited Tibet in 2009, up 147 percent from a year earlier, according to the Pacific Asia Travel Association. Of that, 5.39 million were domestic travelers.

"There's a great deal of affluence in China," said Judy Reeves, a spokesman for Shangri-La Asia, based in Hong Kong. "So much wealth has been created. The demand for luxury is insatiable."

China, whose population is projected to climb to 1.4 billion from 1.3 billion in the next five years, may account for a record 30 percent of global growth over the next decade, UBS said earlier this month. The country will overtake the U.S. to become the world's largest economy by 2020, according to a report from Standard Chartered.

Hilton Hotels & Resorts, a unit of McLean, Va.- based Hilton Worldwide that oversees the company's namesake brand, operates eight properties in China and has 34 more planned. Some of the locations the company is adding are in regions that attract more domestic and business travelers than overseas tourists.

This entry passed through the Full-Text RSS service — if this is your content and you're reading it on someone else's site, please read our FAQ page at fivefilters.org/content-only/faq.php
Five Filters featured article: Beyond Hiroshima - The Non-Reporting of Falluja's Cancer Catastrophe.