Guangzhou lags behind Shanghai and Beijing in upmarket hotel presence, but that is set to change in the next two years. International hotel groups are making plans for ambitious projects and the Guangzhou authorities have recognised the urgent need to open the market to international chains in preparation for the 2010 Asian Games in Guangzhou.
Until recently, this market was partially closed to international investors and jealously protected by local interests. It has a total of 42,000 rooms - and only 4,275 rooms in the five-star category.
There are also few international chains in the mid-range category - the only players are the Holiday Inn and the Baiyun Hotel managed by Best Western, at room rates of about 440 yuan per night.
Room shortages become more acute during the twice-yearly China Export Commodities Fair, which attracts about 180,000 visitors for each session. Room rates during this period go through the roof, reaching US$400 in a five-star hotel or US$200 for three- to four-star hotels.
A hotel industry source said the occupancy rate went as high as 92 per cent in November for the Garden Hotel, compared to the average occupancy of 86 per cent for the Garden Hotel last year and more than 80 per cent for two other major hotels, the White Swan and China Marriott.
Several international hotel groups have announced plans for Guangzhou ventures in the past two years, among them the Ritz-Carlton, Shangri-La, Crowne Plaza, Grand Hyatt, Marriott and Accor.
The Shangri-La group plans to open its 750-room Shangri-La Pazhou hotel at the Guangzhou International Convention and Exhibition Centre in early 2007.
Nearby, the Ritz-Carlton also hopes to open its property in early 2007. This property, with 353 rooms and 120 serviced private residences, is located in Zhujiang New Town, an urban complex on the north bank of the Pearl River.
Communications director for the Ritz-Carlton group, Michelle Wan, said the targeted occupancy rate for the hotel was well over 70 per cent, and room rates were estimated at US$180.
The Marriott and Hyatt are also building in Zhujiang New Town in separate investments worth
1.5 billion yuan and 1.7 billion yuan, respectively. With 400 rooms, the Grand Hyatt is due to open in late 2007.
Crowne Plaza, the business-oriented brand of the InterContinental Hotels Group, is also opening new premises in Guangzhou, while the Westin and Sheraton are prospecting.
In September, the French group Accor signed its first contract with the municipal authorities to develop a Sofitel hotel in the business district of Tianhe, located near the railway station connecting Guangzhou to Kowloon. Accor is also building a Novotel hotel at Guangzhou's new Baiyun International Airport.