|By Douglas Hanks III, The Miami Herald|
Knight Ridder/Tribune Business News
Feb. 7, 2005 - As a booming economy pulls in foreign business executives and Beijing prepares to host the summer Olympics in 2008, it's no surprise that hotels have become China's latest growth industry.
But concerns about finding enough managers to staff the new properties -- not to mention worries about meeting Western standards for luxury service -- have Chinese officials turning to the Sunshine State for help.
Florida International University has joined with Tianjin, a city 70 miles from Beijing, to open a new hotel-management school there. The idea is to export Fortune 500 management techniques to China.
Chinese hotels are "over-staffed because the labor is so inexpensive. But they don't know what to do," said Joseph West, dean of FIU's School of Hospitality and Tourism Management. "If you have a problem with the bill, it takes three people to get it changed."
Added Peng Lu, the Chinese academic FIU hired in 2001 to pursue projects in China: "They have five-star hotels, but two-star -- or one-star -- service."
Not everyone shares their view of Chinese service, but there's no debate that Chinese tourism and the country's hotel industry are growing rapidly. The World Tourism Organization predicts China will emerge as the planet's top tourist attraction by 2020, passing Europe and the United States.
Most major hotel operators have been running hotels there for at least a decade, but they've begun major expansions in recent years. Starwood Hotels & Resorts has opened or launched 15 hotels in China -- a move set to double the company's Chinese portfolio by 2008.
Part of the boom comes as factory towns try to diversify their industrial economy, said Jeffrey Williams, a partner in the New York-based architectural firm BBG-BBGM, which is designing hotels in China.
"There's not a lot of culture or history to see" in these cities, Williams said. "They understand one of the first things they can do -- at least to attract international travelers -- is to build a world-class hotel."
The FIU school scheduled to open in Tianjin in the fall of 2006 is a major undertaking for the North Miami-based hospitality program, which consistently ranks in the top 10 hotel colleges in the country.
FIU's hospitality program enrolls about 1,000 students, but the 80-acre Tianjin campus is expected to have double that by 2011. The school will be the second-largest foreign campus in China and the largest international outpost for any school in the Florida system, according to FIU.
Classes will be taught in English by a mostly Chinese faculty of business professors who will first complete courses at FIU's American campus.
FIU's Asian venture offers a look at many of the economic forces transforming China.
Government subsidies, for example, are funding construction of the Tianjin facility, one of thousands of state initiatives to modernize China's sprawling economy. FIU is "not paying for a dime of it," West boasted.
Cheap labor will keep development costs low -- $26 million, compared to the $200 million FIU says it would cost to build the same facility in Miami. The glut of cheap labor will also let FIU run the campus, scheduled to open with a class of 500, for a fraction of the budget of its hospitality program in North Miami.
Like many American businesses, FIU sees its move into China as a potential cash cow.
The university -- which saw tuition from foreign students plummet in the midst of post-9/11 visa hassles -- will keep 49 percent of the tuition revenue. But FIU will only be responsible for faculty salaries and other instructional expenses, with the Chinese picking up the tab for everything else.
FIU plans on charging Chinese students 34 percent more than Florida residents pay FIU -- still a significant discount given that out-of-state students at FIU's South Florida campuses are charged four times the in-state rate.
Students at the Tianjin campus will pay 33,000 Chinese yuan (about $4,000 in U.S. dollars) a year for tuition, compared to the 3,000 or 6,000 yuan most of China's state-run schools charge.
West said that 10 years ago FIU could never make the numbers work in China because there wasn't the private wealth to pay tuition. Now there's a new Chinese upper class with the means to send a child to an expensive American university.
And West predicts revenue will grow with the Chinese economy. "As Chinese education gets more expensive," he said, "we will adjust our tuition."
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