Shangri-La And Charging Regular Rates To Chinese Businesses
Interesting article in the International Herald Tribune on the worldwide expansion plans of the Shangri-La Hotels and Resorts luxury hotel chain. Shangri-La is based in Hong Kong, is majority controlled by the Kuok Group, founded by Malaysian billionaire Robert Kuok. The Shangri-La group operates two brands: the five-star Shangri-La and the four-star Traders hotels.
Thrust of the story is an interview with Shangri-La's chief executive, Giovanni Angelini, regarding Shangri-La's taking its hotels to Asia and the United States and building its name there. The company is the largest operator of luxury hotels in mainland China and is planning to double its current 20 hotels by 2010.
What I found fascinating about the article though, was Angelini's views on the future of China travel.
"By the year 2020, it is expected there will be more than 100 million Chinese travelers," he said. "Can you imagine the impact? Japan has made a tremendous impact in the industry and it never reached more than 17 million travelers.
"If you go back 30 years ago," Angelini continued, China is "exactly the way the Japanese were, traveling in groups around a little flag, negotiating the lowest rate. But look where the Japanese are now: in top hotels and big spenders. The Chinese market will be much stronger and develop much faster."
I think he is absolutely right and I think what he says will apply to all industries. Right now, talk to anyone who provides high end legal, financial, public relations, design, consulting, advertising, or other kinds of business services in China and I can assure you will be able to get them to complain about the unwillingness of most Chinese companies to pay their fees. Based on my own experiences in dealing with Korean and Russian companies over the last 15 years -- as frustrated as I am -- I am always counseling patience by saying "it will change."
Mr. Angelini would agree.
Comments (2)
Read through and enter the discussion by using the form at the endJeremy Gordon - October 6, 2006 11:22 AM
The potential is certainly huge, and the market is waking up to this (so I hope you don't mind a quick plug...). We are co-hosting a major China travel conference in London on 6 November -- There is also an interesting post on the outbound sector from the conference orgaiser, Roy Graff: Happy travels!
China Law Blog - October 7, 2006 9:36 AM
Jeremy --
Thanks for checking in and thanks for letting our readers know of the upcoming Europe-China travel conference. London is so fabulously expensive that if it can make it as a Chinese travel destination, it would certainly bode well for less expensive locales.