My Opinion My Opinion of of

China HotelsChina Hotels

About MeAbout MePhilip Wei (Philip Wei (魏黎魏黎 ))

Director of Sales & MarketingDirector of Sales & Marketing

Crowne Plaza Resort Yalong Bay SanyaCrowne Plaza Resort Yalong Bay Sanya M.P.: 13876201988M.P.: 13876201988

Philip.wei@ichotelsgroup.comPhilip.wei@ichotelsgroup.com

Intercontinental Hotels Group 9 yearIntercontinental Hotels Group 9 year Shangri-La Hotel & Resort 3 yearShangri-La Hotel & Resort 3 year Gloria Regional Office 1 yearGloria Regional Office 1 year Hong Fu Hotel Xinjiang 2 yearHong Fu Hotel Xinjiang 2 year

74, 000

75, 000

76, 000

77, 000

78, 000

79, 000

80, 000

81, 000

2004 2005

scal ar

Current StatusCurrent StatusComparison of International Tourist Comparison of International Tourist ScalarScalar

20042004 20052005

Person-time:Person-time: 766 million 808 million 766 million 808 million

20042004 20052005

Person-time:Person-time: 766 million 808 million 766 million 808 million

International Tourism International Tourism

up byup by 5.5%5.5% to to

808 million arrivals in 808 million arrivals in 20052005

International Tourism International Tourism

up byup by 5.5%5.5% to to

808 million arrivals in 808 million arrivals in 20052005

AirlinesAirlines

China EuropeChina Europe

China AirlinesChina Airlines

Lufthansa AirlinesLufthansa Airlines

Virgin AirlinesVirgin Airlines

France AirlinesFrance Airlines

Europe AirlinesEurope Airlines

Finland AirlinesFinland Airlines

Argentine AirlinesArgentine Airlines

Aircraft scalar of Europe market

China-Europe flights market will increase China-Europe flights market will increase

three times.three times. In the coming four and five years, the market will have In the coming four and five years, the market will have more than 600 weekly flights. Airlines have the non-stop more than 600 weekly flights. Airlines have the non-stop flights and airline-airports will from the 29 increase to the flights and airline-airports will from the 29 increase to the 65 in 2019. By then, there will be nearly 20 European 65 in 2019. By then, there will be nearly 20 European and Chinese airlines compete in the market.and Chinese airlines compete in the market.

In the coming four and five years, approximately In the coming four and five years, approximately 120 120 aircraftsaircrafts in flight between Europe and China. in flight between Europe and China.The market can see all the long-range aircraft, the The market can see all the long-range aircraft, the number of seats ranging from 180 to 500. Competing number of seats ranging from 180 to 500. Competing airlines excess of the quantity and market will determine airlines excess of the quantity and market will determine the composition of this fleet. Increasing competitive the composition of this fleet. Increasing competitive pressures will limit the growth of average size of aircraft. pressures will limit the growth of average size of aircraft. In China-European market, this growth will remain flat.In China-European market, this growth will remain flat.

Do you knowDo you know

How many Star-rated hotels in ChinaHow many Star-rated hotels in China??

Total above 3-Star hotels in ChinaTotal above 3-Star hotels in China

26692669

05’ 06’ 07’05’ 06’ 07’

1820 2669 28331820 2669 2833

International Brand HotelsInternational Brand Hotels

Intercontinental Hotels GroupIntercontinental Hotels Group

StarwoodStarwood

MarriottMarriott

Hyatt Hyatt

HiltonHilton

AccorAccor

Four SeasonsFour Seasons

Ritz-Carlton Ritz-Carlton

Howard JohnsonHoward Johnson

Days InnDays Inn

Ramada Ramada

Asian Brand HotelsAsian Brand Hotels

Shangri-La Hotel & ResortShangri-La Hotel & Resort

Meritus HotelsMeritus Hotels

Chinese Brand HotelsChinese Brand Hotels

GloriaGloria

Jin-jiangJin-jiang

White SwanWhite Swan

Garden HotelGarden Hotel

Jinling HotelJinling Hotel

Key cities in ChinaKey cities in China

BeijingBeijing

ShanghaShanghaii

ChengdChengduu

GuangzhouGuangzhou

ChongqinChongqingg

ShenzhenShenzhen

NanjingNanjingXi’anXi’an

DalianDalian

QingdaoQingdao

HangzhouHangzhou

Cities A:Cities A:

Cities B:Cities B:

Cities C:Cities C:

TaipeiTaipei

SanyaSanya

GansuGansu

TaiyuanTaiyuan

ZhenzhouZhenzhou

ChangshaChangshaGuiyangGuiyang

KunmingKunming

LanzhouLanzhou

LasaLasaWuhanWuhan

Current StatusCurrent StatusComparison of Brands hotels expansion scalarsComparison of Brands hotels expansion scalars

Foreign Chains ’05 ’06 ’08Intercontinental Hotels Group 54 80 180Intercontinental Hotels Group 54 80 180Starwood 18 22 33Starwood 18 22 33Marriott 39 50 80Marriott 39 50 80

Asian ChainsShangri-la 17 20 37Shangri-la 17 20 37Meritus 2 4 10Meritus 2 4 10

Chinese ChainsGloria 11 16 30Gloria 11 16 30Jin-jiang 79 89 100Jin-jiang 79 89 100

Type of cooperationType of cooperation

Own HotelOwn Hotel: Shangri-La, Gloria, Meritus: Shangri-La, Gloria, Meritus

Management HotelManagement Hotel: IHG, Starwood, Hyatt, : IHG, Starwood, Hyatt,

Accor, Marriott Accor, Marriott

FranchiseFranchise HotelHotel: Ramada, Days Inn, : Ramada, Days Inn,

Howard JohnsonHoward Johnson

Charge Charge Management ModeManagement Mode

Management Management IHGIHG StarwoodStarwood

Marriott Marriott Accor Accor

FranchiseFranchise RamadaRamada Days InnDays Inn

Market Market Business ElementsBusiness Elements

FIT Business and Leisure travelersFIT Business and Leisure travelers InternetInternet MICEMICE Tour GroupsTour Groups

High price High qualityHigh price High quality

PricePrice

Low price Insure volumeLow price Insure volume

Human ResourceHuman Resource

Tourism schoolTourism school

Understaffed Understaffed Periodic trainingPeriodic training

Floating employeesFloating employees

Cities ACities A 5~6 Foreign experts 5~6 Foreign experts

Cities BCities B/ / Cities CCities C 2~5 Foreign experts 2~5 Foreign experts

Relation ShipRelation Ship

Government relationGovernment relation

Customer relationCustomer relation

Owner relationOwner relation

PotentialPotentialOpportunities in ChinaOpportunities in China

Big city still want top brand hotelBig city still want top brand hotel

Too much potential medium citiesToo much potential medium cities

Resort Destination DevelopmentResort Destination Development

Real estate of China high-speed developingReal estate of China high-speed developing

More and more Medium hotels open continuously More and more Medium hotels open continuously

such as IBES, Holiday Inn Expresssuch as IBES, Holiday Inn Express

Face weaknessFace weakness

Cases:Cases: Mar,06 Hilton remove from Shenzhen Pengnian hotel, which they Mar,06 Hilton remove from Shenzhen Pengnian hotel, which they

just took over for 1 year just took over for 1 year Jan,06 Hong Kong China Travel took over Hilton Nanjing Jan,06 Hong Kong China Travel took over Hilton Nanjing Apr,05 Hilton was compelled removed from DalianApr,05 Hilton was compelled removed from Dalian Sep,05 Nanjing Dingshan hotel stopped cooperate with Shangri-LaSep,05 Nanjing Dingshan hotel stopped cooperate with Shangri-La 04 Crowne Plaza was compelled removed from Shijiazhuang04 Crowne Plaza was compelled removed from Shijiazhuang

Higher operating costs of International Hotels;Higher operating costs of International Hotels; Professional managers are strangers for the domestic market and culProfessional managers are strangers for the domestic market and cul

ture;ture; High staff turnover and a shortage of local professional personnel;High staff turnover and a shortage of local professional personnel; Most of owners are impercipient about the weakness of international Most of owners are impercipient about the weakness of international

hotel groups management in China;hotel groups management in China;

Above deficiencies disturb international hotel groups expand in the CAbove deficiencies disturb international hotel groups expand in the Chinese market.hinese market.

Sheraton Resort SanyaSheraton Resort Sanya

Paradise Hotel JiuzhaigouParadise Hotel Jiuzhaigou

Grand Hyatt ShanghaiGrand Hyatt Shanghai

Grand Hyatt ShanghaiGrand Hyatt Shanghai

The top brand hotel of Spain come into The top brand hotel of Spain come into China 2007 China 2007

in Shanghai with 600 roomsin Shanghai with 600 rooms

More information More information ofof

hotels in China hotels in China

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China!China!