By Prudence Lui 

The Beijing Tourism Administration (BJTA) plans to expand its star-graded hotel portfolio from the current total of 506 to 800 before the start of the 2008 Beijing Olympic Games, resulting in annual growth of at least 7-8%.  
 
Hotels that have operated for at least 12 months will be able to apply for national grading, according to planning and statistics director, Fang Zehua, who added that most of them would be low-grade outlets converted and upgraded to star standard. 
“These include local accommodations targeting domestic Chinese which lack English-speaking staff, F&B services and even in room TV,” he said.

Last year, the BJTA approved and added 122 star-graded hotels. It now lists 21 5-star, 43 4-star, 154 3-star, 230 2-star and 58 1-star hotels, with a combined total of 92,800 rooms. Average occupancy was 61% and average daily rate (ADR) US$41. 

However, the BJTA cannot predict how many new properties are in the pipeline as hotels above 3-star no longer require BJTA approval provided they follow city-planning regulations.
 

The newest property is the 4-star, 293-room Marco Polo Beijing in Xidan, which soft-opened in December with a low-season rate of $28.  Sales and marketing director Godfrey Wong is positive for 2002, given China’s entry to the WTO and an increase in domestic corporate travel. “With our excellent location - situated west

The Marco Polo Beijing 6 Xuanwumen Nei Avenue Xicheng District, Beijing 100031 China

The Marco Polo has a target occupancy of 64%, divided evenly between leisure and corporate travellers. 

In a bid to boost brand awareness in China and to tap the outbound market, Marco Polo plans to open a group sales centre in Beijing by the middle of the year.

Occupancy at the 591-room Grand Hyatt Beijing, which soft-opened last October, reached 96% in January, with an ADR of $122. The property is owned by Hong Kong tycoon Li Ka-shing.

George Wee, GM of the Shangri-La Beijing, said the slowdown of the US economy and the effects of  September 11 hit business. Occupancy from the corporate market, which represents about 40% of total occupancy, declined by about 5% compared to 2000, while ADR fell 2%.

The arrival of new competitors and the booming economy has forced several established players to reposition and upgrade. 

The Gloria Plaza Beijing, for example, has repositioned itself as a corporate hotel and is aiming for higher yields. “In the last few years, we’ve seen more and more multinational investors, such as Siemens, coming to Beijing, and demand is growing,” says GM Peter Ng. The 423-room hotel plans to begin an eight-month renovation programme from April, with inroom broadband facilities installed. About 70% of the hotel’s business is from local Chinese, and there is also growth from the Korean and Taiwanese markets.

The Palace Hotel Beijing is competing head on with the newcomers by upgrading its products and services. Rooms are being renovated and 30 new suites will be competed by mid-2003. The 230-seat Jing restaurant, which emphasises a  “Modern-meets-Asian” theme, opened in January.

Fast Facts:

• In 2001, there were 92,800 hotel rooms in Beijing, with average occupancy of 61% and ADR of US$41;
• The BJTA last year screened and approved 122 hotels to enter its star-graded list – two 5-stars, eight 4-star, 27 3-stars, 67 2-stars and 18 1-stars. This increases the portfolio to 506, with about 92,777 rooms (165,504 beds);
• Beijing Tourism Bureau aims to achieve 800 star-rated hotels in time for the 2008 Olympic Games; 
• Beijing received 2.86 million overseas visits last year (up 1.31%), while foreign receipts increased by 6.5% to $2.95 billion;
• The domestic market totalled 74.62 million visits and generated $10.7 billion in tourism receipts.