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Ritz makes China push, plans 7 new sites by 2010

(Wall Street Journal)
Updated: 2007-12-05 14:32

Ritz-Carlton Hotel Co expects to open seven hotels in China and triple the country's share of its total revenue to almost 20 percent by 2010, according to the company's president and chief operating officer.

The luxury-hotel operator, owned by Maryland-based Inc, is opening its fourth China property in Beijing next week, marking the start of a major expansion in the Chinese mainland and Hong Kong.

Including the new Beijing hotel, which Cooper said has among the biggest standard-size rooms in Beijing, the company runs 69 hotels and resorts world-wide.

The expansion comes as hotel companies race to grab a share of China's travel market ahead of the Olympics next year. The number of domestic trips taken by Chinese in 2006 rose 15 percent from 2005, to 1.2 billion, according to London-based market researcher Euromonitor International. The firm estimates that number will reach two billion by 2011.

Marriott International, PLC and Wyndham Hotels & Resorts LLC have hotels in Beijing and the surrounding area set to open before the Games. French hotel company Accor SA plans to double the number of its hotels in Greater China in the next three years.

Ritz-Carlton opened its first China hotel in Shanghai in 1998 and now has hotels in Hong Kong and Beijing as well.

In addition to the Beijing location opening next week, Ritz-Carlton plans to open hotels in Guangzhou, Shenzhen and the southern resort city of Sanya in the next three months. New properties in Shanghai, Macau and Hong Kong are to follow.

Cooper said Ritz-Carlton's growth strategy isn't only to fill its new hotels with domestic travelers but to build the Ritz-Carlton brand within China so the rising number of outbound Chinese tourists will stay at Ritz-Carlton properties abroad.

"I think you're going to find a very sophisticated outbound Chinese traveler who is going to seek out luxury hotels wherever they go," he said. "As people acquire wealth and sophistication, they will graduate" from staying at low- to midprice hotels.

Though Ritz-Carlton's new hotel in Beijing is fully booked for the Olympics, Cooper said the company's goal will be to continue performing after the Olympics. He is optimistic, because running a hotel in a growing market like Beijing is easier than in mature markets, he said.


(For more biz stories, please visit Industry Updates)



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