Starwood Hotels & Resorts is planning to open 20 new hotels in China in 2013. Having doubled its footprint in the destination in the last three years, Starwood has 120 hotels open and more than 100 in the pipeline, making China the company’s second largest hotel market behind only the United States, and its fastest growing.
Starwood President and CEO Frits van Paasschen who is in China this week participating in the Fortune Global Forum in Chengdu said the company will open one new hotel every 20 days here and that 70 percent of its pipeline of new hotels under construction and in development are in second and third tier cities.
“We continue to view China as a once-in-a-lifetime opportunity for our business,” said van Paasschen. “Whether it’s growing our hotel footprint as part of the country’s massive infrastructure development, or aggressively building our loyalty program in the world’s fastest growing domestic and outbound travel market, we are focused on taking every advantage of our important first-mover position in China.”
Starwood’s presence in China dates back to 1985 when the Sheraton Great Wall Beijing debuted as the first international hotel in the People’s Republic of China. Today Starwood is the largest high-end hotel operator in China with more hotels here than competitors Marriott, Hilton and Hyatt combined. In 2012 Starwood opened 25 hotels and signed 36 new hotel deals – a record number of openings and deals.
With over 170 cities with population over 1 million, the runway to grow in China continues to be long. Adding to Starwood’s long established presence in China’s major cities, the company is focused on expansion in second and third tier cities. Starwood’s upper upscale Sheraton, Westin and Le Meridien brands continue to be sought after for new central business districts and government administrative centers in second tier cities. Starwood’s Four Points by Sheraton and Aloft brands fit well in newly developed high-tech, industry and university parks as well as near high speed railway stations and cities in early stages of urbanization, in addition to ongoing expansion in established markets.
Demand for luxury hotels throughout China continues to grow and over the next few years Starwood will double its luxury footprint here. W Hotels, which just opened the W Guangzhou earlier this year, will open new flagships in Beijing and Shanghai as well as hotels in, Suzhou, Changsha and Chengdu. St. Regis, Starwood’s ultra-luxury brand, will build on its well established presence in China in markets including Beijing, Shenzhen and Sanya with new hotels in Changsha, Chengdu, Lijiang, Qingshui Bay, Zhuhai and Nanjing while Starwood’s Luxury Collection will expand in Dalian, Hangzhou, Nanning, Xiamen, Nanjing and Suzhou.
According to the UN World Travel Organization (UNWTO), China is now the world’s number one tourism source market in terms of spending, surpassing Germany and the United States. In 2012, China’s expenditure on travel abroad reached US$102 billion.
China is now Starwood’s second largest source of travelers behind only North America and in 2012 outbound Chinese travel to its hotels grew by 20%. Already the largest feeder market to Starwood hotels in Asia, China is by far the company’s fastest growing travel market. According to van Paasschen, accelerated Chinese outbound travel is impacting business around the globe, and last year 95% of Starwood’s hotels across nearly 100 countries welcomed guests from Greater China.