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Global hotel pulse: Asia/Pacific news
January 24 2012

In this month’s roundup of news from the Asia/Pacific region: Hyatt introduces Hyatt House in India; China Lodging pursues an aggressive expansion strategy; and IHG will launch a new upscale chain in India.

  • Hotels in The Asia/Pacific region saw an increase in key operating metrics during 2011, according to STR Global.
  • InterContinental Hotels Group is planning an upscale chain for China.
  • China’s GDP slowed to 8.9% during the fourth quarter. each week features a news roundup from a different region of the world. Today’s review covers Asia/Pacific.

Regional hotel performance
Hotels in the Asia/Pacific region experienced positive results in the three key performance metrics in 2011 when reported in U.S. dollars, according to data compiled by
STR Global, a sister company of
In year-over-year measurements, the Asia/Pacific region’s occupancy ended the year virtually flat with a 0.2% increase to 66.8%, its average daily rate increased 9.5% to US$140.44 and its revenue per available room was up 9.8% to US$93.84.

Hyatt introduces Hyatt House in India
Hyatt Hotels Corporation announced the introductions of its Hyatt House extended-stay brand in India, with the signing of a management agreement by a
Hyatt affiliate for a hotel in Mumbai. The company also announced that Hyatt affiliates signed management agreements for an additional seven full-service hotels and 14 select-service hotels in India, bringing the total number of announced Hyatt-branded hotels under development in India to 53.

The 170-room Hyatt House Mumbai will be located within close proximity of Chhatrapati Shivaji International Airport.

China’s GDP growth slows during Q4 2011
China's gross domestic product growth slowed to 8.9% during the fourth quarter of 2011, compared with a year earlier, and a report in the
Wall Street Journal said that slowdown shows the world's fastest engine of growth is downshifting.

The global economy increasingly depends on China for growth, the newspaper reports. An expanding Chinese economy creates demand for commodities from many developing countries and for industrial products and services from wealthy ones.

One of China's major weaknesses is its property market, the WSJ reports. Beijing is trying to rein in prices by making it more difficult for developers to finance luxury apartments and making it harder for investors to buy them by requiring down payments of as much as 60%, among other measures. Almost two years of such controls on the property sector has put a serious dent in sales, and developers are starting to go slow on new projects.

China Lodging CEO details expansion plans
China Lodging Group’s founder and newly appointed CEO, Qi Ji, said in a conference call earlier this month he’s not satisfied with the growth of the Shanghai-based economy chain’s Seasons Hotels and Hi Inns brands.

To remedy the company’s stagnated growth of its two smaller brands, the company will pursue an aggressive, multibrand strategy during 2012 that will see the addition of 25 to 30 Seasons hotels and 10 to 15 Hi Inns. As of 30 September, there were 20 Season properties and 26 Hi Inns in operation. 

China Lodging Group also has 534 HanTing Express properties in operation, with plans to add 240 to 250 more during 2012.  

The two smaller brands will have dedicated operational teams, while the supporting platforms and infrastructure will be shared with HanTing Express to achieve economies of scale, Ji said.

Read “New China Lodging CEO details expansion plans.”

Hotel supply outlook
The Asia/Pacific hotel development pipeline comprises 1,460 hotels totaling 355,957 rooms, according to the December 2011 STR Global Construction Pipeline Report.

Among the chain-scale segments, the upper-upscale segment accounted for the largest portion of in the total active pipeline (25.6% with 91,192 rooms). Three other segments each accounted for more than 15% of rooms in the total active pipeline: the upscale segment (23% with 81,748 rooms); the luxury segment (19.1% with 67,847 rooms); and the unaffiliated segment (15.2% with 54,027 rooms).

Chatwal Hotels & Resorts to expand in India
Hampshire Hotels & Resorts, the management arm of Chatwal Hotels & Resorts, unveiled an aggressive brand-building initiative in India with the announcement of a five-year plan to launch 52 hotels (40 Night hotels and 12 Dream hotels) in India. The company is seeking franchise and management opportunities for both brands; the initial launch sites will be a Dream resort in Goa and India’s first location for Night in Chennai. These will be followed by New Delhi and Mumbai along with Bangalore, Hyderabad, Kolkata, Jaipur and Udaipur.

Chatwal already has invested more than US$180 million in India and has another equity investment of more than US$300 million planned that will go towards setting up initial infrastructure towards operation of the large chain.

IHG to launch new upscale chain in China
InterContinental Hotels Group announced it will launch a new upscale hotel chain in China in the next six months,
according to a Dow Jones Newswires report. Eventually, the company plans to export the brand across the booming economies of Asia/Pacific as it strives to become the operator of choice for increasingly wealthy Chinese travelers at home and abroad.

"We have spent quite a long time trying to understand what the domestic Chinese traveller wanted. There's obviously a lot of interest in a domestically grown brand that has got the benefit of a large international system behind it. Owners have shown significant interest," Jan Smits, chief executive for the company’s Asia, Middle East and Africa operations, said.

IHG, which largely operates an asset light, franchise model in partnership with hotel owners rather than owning them directly, has signed 12 initial contracts for the new hotel chain across China, including Beijing, Shanghai and both second and third tier cities. It will then expand the brand overseas over the next few years to attract growing numbers of outbound Chinese tourists, which are expected to rise fivefold to 100 million a year in the next decade.

Key openings, transactions
• Jumeirah Group signed a management agreement with PT Asia Pasifik Properti to operate the Jumeirah Bali, which is expected to open in 2015 in Bali, Indonesia.  The resort will consist of 80 suites and 25 private villas.
• IHG signed agreements with BIM Group to develop two Crowne Plaza properties. The 200-room Crowne Plaza Vientiane in Laos and the 400-room Crowne Plaza Phu Quoc Resort in Vietnam are both scheduled to open in 2015.
• Hyatt announced the opening of the 236-room Park Hyatt Ningbo Resort and Spa. The hotel is the first Park Hyatt-branded resort in China.
• The 270-room Crowne Plaza Semarang opened its doors on 22 January. It is the first Crowne Plaza-branded hotel in Indonesia’s Central Java province.
• IHG signed an agreement with RB Capital to manage Kuala Lumpur’s first Holiday Inn Express. The 200-room Holiday Inn Express Bukit Bintang is slated to open in 2015.
• Starwood Hotels & Resorts Worldwide opened the 297-room St. Regis Shenzhen in China.
• Hilton Worldwide signed a management agreement with ASV Investment Company to introduce the first DoubleTree by Hilton property in Japan. The 228-room DoubleTree by Hilton, Naha, will be located in Naha, the capital city of Okinawa, and is scheduled to open in mid-2012.

Compiled by Stephanie Wharton.

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