Hotel Reform in China

The hotel industry in China is currently going through fundamental reform in ownership structure and development. A SWOT (strengths, weaknesses, opportunities, and threats) analysis as reforms go forward reveals development opportunities as well as vulnerabilities to internal organizational and external environmental changes. Notable strengths include a growing market and the government’s push to upgrade all hotel standards. Weaknesses include an overleveraged industry that has long been operated inefficiently by government entities. New and reinvigorate operators have great opportunities in this situation, as do those who offer ancillary services and management education. The greatest foreseeable threat is an economic slowdown or other event that interferes with tourist growth. With the 2008 Olympiad to be held in Beijing and a World Expo slated for Shanghai in 2010, such a downturn would most likely be temporary—meaning that the Chinese hotel industry has excellent prospects overall.