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New resorts not the last resort

THE resort market in China remains largely untapped and could become one of the next opportunities for hotel investors.

This was despite the global financial crisis which, coupled with an oversupply of hotel rooms, has been affecting hotel investment sentiment in the country.

"Investors are certainly much more cautious now but China continues to be a bright spot as most of them look at the country in the medium-to-long term," David Ling, managing director for Asia Pacific operations at HVS International, told Shanghai Daily while attending the China Hotel Investment Summit which ended today in the city. "The country is still full of opportunities though the coming few years might be hard for some hotel operators."

The resort market, for example, is just one segment basically untapped by hotel investors at the moment, according to HVS, a leading hotel valuation, consulting and investment services firm.

Only a few resort destinations can be found in China - like Sanya in Hainan Province, part of Yunnan Province, and Jiuzhaigou Valley in Sichuan Province. This is a rather small portfolio compared to the plentiful tourism resources of the country.

Perfect locations for future resort developments could be found perhaps in mountain areas with a traditional Chinese culture.

For example, Putuo Mountain in Zhejiang Province, Emei Mountain in Sichuan Province and Jiuhua Mountain in Anhui Province, all sacred Buddhist mountains, have great potential to be developed into resort areas over the coming two to three years, HVS predicted.

Ski resorts, popular in many developed countries, are another market that hotel investors could tap into, the company said.

Peter Zhao, a management expert at Hotelsolution Consulting Co Ltd, agreed that while oversupply has become a big problem for hotel operators in some parts of the country such as Beijing, the overall industry outlook still remained upbeat.

"It is a global tourism trend and more people will choose to spend their vacations in resorts in the future rather than taking tightly-scheduled sightseeing trips," Zhao said. "This will definitely help create opportunities for hotel investors as the resort market is rather underdeveloped in China at the moment."

Currently, resort tourism only accounts for 20 percent of the country's tourist trade while sightseeing trips generate about 40 percent, according to Hotelsolution Consulting.


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