January 3, 2008 -- Twenty-six hotels have joined the Hubei Tourism Association in December, a sign of the city's growing importance to the hospitality industry.
Hubei and its capital city, Wuhan, is expected to profit from the upcoming Olympics, as well as the continuing liberalization of the tourism industry required under China's WTO agreement.
"The hotel industry has great potential in China"said David Sun, CEO of Chinese economy hotel chain Home Inns, in a statement. "Besides first-tier cities like Shanghai and Beijing, second or third-tier cities like Qingdao and Wuhan also have a lot of room for growth -- especially benefiting from the Beijing Olympics. It is quite understandable that many domestic hotels have joined industry associations to sharpen their competitiveness with our foreign rivals.''
Home Inns is a leading economy hotel chain in China. Since Home Inns commenced operations in 2002, the company says that it has become one of the best- known economy hotel brands in China, with 201 hotels in 66 cities around China.
International hotel brands like America's Green Tree Inn also see great opportunities in the booming Chinese tourism market and the rapid development in the hospitality industry. Since its entry into Chinese market in 2004, Green Tree Inn has opened more than 120 hotels in China. In August 2007, Green Tree Inn Hotel Management Co., Ltd. settled in Wuhan and set up five hotels – the first wholly foreign-owned hotels in the city.
"The goal of Green Tree in Wuhan is to open eight to ten hotels there and extend it to the whole Hubei with 30 hotels," said Ya Hu, general manager of Wuhan GreenTree Inn. "With the increasing intense competition in first-tier cities, we are switching our strategy to second-third-tier cities. We take the lead in the entry of Wuhan in hope of developing the local market and expanding our brand. Later comers grab less market share. "
With foreign hotel brands flooding in, local hotels have felt an urgent need to join forces to better market themselves, which is where the Tourism Association comes in. Today, 138 out of a total of over 560 "star" hotels are already members.
"Facing the heated competition from their foreign counterparts, Wuhan's local hotels -- like the Yangtse Group -- have been making efforts to differentiate their particular selling points, such as interior design or quality service," Zhiqing Zhu, vice president of the Hubei Tourism Association, told Emerging China.
According to Zhu, the hotel industry in Huhan has entered the era of market fragmentation.
"Professional service, comfortable rooms, convenient locations, and reasonable prices are necessary but not enough to expand local hotel brands," he said. "Joining a tourism association will help to open more marketing channels and urge member hotels to standardize services and management."