Shangri-La Hotels looks to China, India for growth

May 15, 06 | 7:58 am

The Hong Kong-based Shangri-La Hotels and Resorts will tap into the burgeoning China market with plans to roll out the bulk of its 40 new hotels there over the next four years.

Shangri-La, which now operates 47 hotels across the world, will open two-thirds of the 40 new hotels in China and India.

Shangri-La chief marketing officer Martin Waechter said now was the time to capitalise on China's expansion.

"In five years it will be too late," he said.

Mr Waechter said the group had had some "very rough" years between 2001 and 2003 because of the threat of the SARS virus and the September 11 terrorist attacks on New York, but was confident that expansion in China would underpin future growth.

"There will be setbacks but I think the entire corporate world believes that China and India are the two growth markets of the future," Mr Waechter said. "Everything we have in the Western world is wanted and needed."

Mr Waechter said Shangri-La planned to develop and retain ownership of the new hotels.

Of Shangri-La's existing hotels, 37 are owned by the group through the Hong Kong-listed Shangri-La Asia, which has a market capitalisation of about $US3 billion ($3.88 billion).

The group currently operates two hotels in Australia, in Sydney and Cairns, but plans to open a hotel in Melbourne in the medium term.

Mr Waechter said Shangri-La also planned to open a hotel in London in 2009 and one in Paris in late 2008.

Those hotels, in prime locations, were to help the group's global branding, but Shangri-La's revenue growth would come from the new Asian hotels.

Mr Waechter said that by 2010 more than 50 per cent of the group's business would come from Asia and China, with 15 per cent from Europe, 12 per cent from America and 7 per cent from Australia.

A spokeswoman for the group said the Shangri-La hotel in Sydney had a strong occupancy of 77 per cent for the year.

The Shangri-La group was founded by Malaysian Robert Kuok, who retains a large holding in the business through the Kuok Group.

Source: The Australian / Property