International luxury hoteliers have been flooding into China at a rapid pace, but they’re having trouble finding guests to fill all of their lavish rooms.
In a recent CNBC interview shown in the video embedded above, Clement Kwok, the CEO of luxury hotel group and Peninsula parent company Hong Kong and Shanghai Hotels, discusses the causes of this issue and what it means for the future of China’s luxury hotel market.
According to him, China saw a massive supply of new luxury hotels prior to the 2008 Olympics, but post-games demand has not been as high as chains would like. “That oversupply situation is still there today,” he said.
However, one bright spot in the China market for his company is the fact that Hong Kong and some mainland markets rebounded quickly from the 2008 financial crisis. In fact, they’re “better than they were before the crisis,” he says.
The main key to the China hotel market, in his view, is to look at the long-term growth possibilities: “I keep on going back to this long-term investment view that we take. We have to sustain through the shorter-term challenges in order to carry our investments through to the long term.”