Developing the Trend of GreenTree

Despite the quick increase in tourism revenue from 12.9 to 16.4%, there is still a surplus of guestrooms which numbered 948.2 thousand in 2000. The demand for macro tourism still exists as the room number grows 6% annually and 55.9% of the average rent rate grows only 2.4% annually, creating a contradiction.

By the end of 2004, there are 283.8 thousand accommodation facilities, including 9751 star hotels, with average room occupation rate of 56.14%. These objective conditions offer good news for changes within the industry. It is the fact that a large number of accommodation projects are running badly. Low star level hotels, hostels with higher standards and sanatoriums must be transformed under two pressures, the greater enterprise revolution and residential market.

Since the 1990s in China, especially the surrounding areas of Shanghai, inter-province tourism and business communication have developed fast. With the development of business, improvement of people’s living standards, descent of Engel´s index, and the emerging of ‘city tourism’ and ‘holiday business’, guests for business, tour and leisure purpose have increased. In the process of growth, guests for business have surpassed those for leisure for the first time.

According to statistics from American Hotel & Lodging Educational Institute, there are 50.39 thousand hotels with revenue ranking 3rd place in the retail industry in the U.S., sharing 70% of the hotel market. In China, economical and business brand hotels only represent less than 10% of the hotel market. Moreover, the class and structures are extremely inadequate. By the end of 2001, there are 570 hotels of high class, 6052 of media class and 753 of low class, which is far from the ratio 1:4:5 in developed countries. Sun Shangqing from Development Research Centre of the State Council pointed out the imbalance on the class structure of tourist hotels in China in his report ‘Tourism Economy Development Strategy’ host by him. There is a trend of business hotels with a clean environment, good facilities, reasonable prices (160 to 300yuan), convenient transportation, sense of safety, special service and distinctions from star hotels and traditional hotels.