Starwood Hotels & Resorts Places Huge Bet On China Market

China Recently Became Starwood’s Second-Largest Market

The Sheraton Qiandao Lake Resort, operated by Starwood (Image: PR)

The Sheraton Qiandao Lake Resort, operated by Starwood (Image: PR)

Hotel and Resort operator Starwood recently announced that China had become its second-largest market, with demand continuing to outstrip supply. Considering 171 cities in China have populations exceeding 1 million people, as Starwood president and CEO Frits van Paaschen said recently, “it’s not hard to imagine that [Starwood] will ultimately have as many hotels in the China as we do in the United States.” Since opening its first internationally branded hotel in China, Beijing’s Great Wall Sheraton, in 1985, Starwood has seen the makeup of its guests in China shift from mostly Western tourists to an increasing number of Chinese travelers — who now account for around 50% of guests at Starwood’s 31 hotels in China.

At the moment, Starwood — like other major hoteliers like Hyatt, Peninsula and newcomer Guoman — is expanding aggressively throughout China, as it looks to gain a foothold in new markets that might not be popular with international tourists but are attracting more domestic Chinese visitors and business travelers. Currently Starwood has 34 properties under development, including 14 for Sheraton Hotels & Resorts and 13 Westin hotels (including the Westin Shanghai and the Westin Guangzhou). Starwood brands St. Regis — which just opened the first international five-star hotel in Tibet — and Le Meridien will also continue expanding in second- and third-tier cities throughout China.

Chris Woronka, an analyst with Deutsche Bank Securities who covers Starwood, says it is too early to tell if or when China will become Starwood’s number one market, but given that China’s GDP is growing at a faster than the US and that the American and European hotel markets are already saturated, China should continue to be a major driver for Starwood’s new developments.

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