China-based Lodging Executive to Speak on Need for Foreign Investment

Jinling Hotels President Frank Hou will present views on growing development opportunities at Hong K

. October 14, 2008

NEW YORK, NY, APRIL 2, 2007. Frank Hou, President of Jinling Hotels Management Co. Ltd., Nanking, China, will present his insights on the rapidly growing China lodging market as one of the featured speakers at the Seminar on China Hotel & Tourism Development, to be held at New York's Le Parker Meridien April 27.

A first-time U.S.-held event, the Seminar on China Hotel & Tourism Development is co-sponsored by The Hong Kong Polytechnic University's School of Hotel & Tourism Management and Hotel Online.

In his presentation, titled "Hotel Ownership and Investment in China," Hou will offer his insights on the excellent opportunities now available for hotel investors and operators to do business in China.

"China is growing rapidly, as everyone knows by now, due mainly to the phenomenal growth rate in the nation's economy," Hou says. "The Chinese government sees the need for more foreign investors to come to China to invest in the hotel market, and the government recognizes foreign investors' significant financial resources and solid understanding of China's business practices and principles."

Hou will discuss the fact that in order to attract foreign investors, the Chinese government has opened up the investment market to offshore investors and created preferential programs, such as tax cuts and other incentive policies, aimed at making hotel investment a more viable option.

Hou will also offer insights on understanding the China's local business culture and government policies.

"If foreign investors invest and operate carefully and diligently in China, the future is very promising," he says. "The potential return on their investment will be lucrative and rewarding."

Ownership scenario undergoing rapid changes

The Chinese government owns the majority of China's lodging properties, Hou says, but that scenario is changing rapidly. At year-end 2005, of the 11,828 two-stars and above hotels registered by the China National Tourism Bureau, 5,528 were owned by the government or government-controlled corporations, 949 were owned by large private corporations, 256 were owned by foreign private investors, 314 were owned by investors from Hong Kong or Macau, and the remainder was categorized as small, privately owned hotels.

"Although it is still a small sector compared to government-owned hotels, private ownership is the fastest-growing segment in the new hotel market," Hou says. "In 2005, about 940 new hotels opened in China, and more than 80 percent of them were built by large private organizations or individuals. This trend will continue into the next few years."

Hou says there are several key reasons for his optimistic outlook for hotel investment in China, the two major ones being rapidly increasing tourism both within the country and from abroad.

"Right now," he says, "China is the No.4 tourist destination in the world, and according to World Tourism Organization projections, by 2020 China will be the No. 1 tourist destination, with more than 130 millions foreign travelers coming to visit. Also, the domestic tourism market is growing at a phenomenal rate of more than 12 percent annually.

"The future looks very bright over the next five to 10 years at least," Hou adds, "so the demand for hotels both by domestic and foreign travelers will continue to provide opportunity for more hotels to be built. And upcoming international events, such as the 2008 Beijing Olympics and the 2010 World Expo in Shanghai, will certainly add more reasons for a brighter hotel market both for investors and operators."

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