The Marriott International Inc hotel group is planning a major expansion in China, seeking to implant itself into second- and third-tier cities, a company executive said Thursday.
"We have another 27 (hotels) in the pipeline (by the end of 2014)," Simon Cooper, president and managing director for Marriott Asia-Pacific, said in an interview in Beijing on Thursday.
Among the plans for new hotels are sites in the cities of Chengdu, Zhengzhou and Guiyang. Marriott currently has 57 hotels in China, with 10 of them in Beijing, according to Cooper.
Marriott may also soon tap into its versatile brand portfolio to diversify its presence in China. Although it counts 20 brands as part of its stable, only six of them have been deployed so far in China. However, Cooper said, more may soon be implanted here as more growth is anticipated. He did not provide a detailed timeframe.
Starwood also recently announced that 16 of the 25 hotels it is to open around the world this year will be in China.
Hilton also announced late last year its plans to open 100 new hotels in China within the next five years.
Some market watchers expressed concerns over the likely overabundance of high-end hotels.
These international hotel management companies do not invest directly in property, but instead provide hotel management services for hotel owners, allowing them to rake in management fees, said Zhao Huanyan, chief consultant of SAO Hotel Solution Consulting based in Shanghai.
"They do not overly worry over quick expansion, although the market is already seeing an oversupply," Zhao pointed out Thursday.
In the first quarter of the year, occupancy rate of five-star hotels in China registered 56.01 percent, below the level needed to break even, according to Zhao.
"There will be oversupply in certain moments. But everywhere that China has created supply, time will always create demand," Cooper retorted.
