THIRTY new upscale hotels will commence operations in Chengdu within the next three years – 12 of which open in 2015 – to add 3,342 more guestrooms to the city’s inventory.
The increased competition is both a source of opportunity and concern for local hoteliers.
InterContinental Hotels Group director of operators, Sichuan, Chongqing and ETG portfolio hotels, David Lim, said that Chengdu’s rapid economic development has boosted demand for international luxury hotels.
Such demand is likely to rise as the influx of investments continues to sustain Chengdu’s economic growth.
Grand Hyatt Chengdu at the Chicony Plaza’s general manager, Liang Jian Bang, commented that while room rates could dip slightly as a result of additional supply, there remains adequate scope for competition.
The newcomers will trigger competition in the market for clients and manpower, predicts Howard Johnson Agile Plaza Chengdu’s marketing and sales director, Tao Bao Lin.
Collective action by all industry players is the only way to avoid the inevitable price war, said Tao.
Ren Ke, marketing and sales director at Grand Hyatt Chengdu, added that hotels opening this year should adopt flexible pricing strategies, instead of a blunt approach, towards MICE and leisure sales.
The flourishing MICE market is large enough for all parties to thrive, said Ren.
According to STR Global’s 2014 statistics, average occupancies at five-star hotels in Chengdu grew by a modest two per cent while room rates declined by nine per cent, a change attributed to increasing competition in the industry.
Article By Jessie Liu. Translated by Ong Yanchun from the original TTG China e-Daily, January 1, 2015
