■ China is now the biggest source market for outbound tourism with estimates that Chinese outbound overnight visits hit 97.3 million last year. While the wider Asia Pacific region welcomes the majority of these visitors an increasing number are coming to Europe and the UK.
■ The UK currently lags France in terms of Chinese visitors attracting only 233,000 last year as opposed to the 1.4 million who visited France. This is largely attributed to the difficulty of obtaining a UK visa. However, Theresa May's announcement in June that the visa system will be streamlined this summer could mean that visitor numbers could reach 650,000 by 2020.
■ The importance of reputation and branding combined with the anticipated increase in Chinese visitors to the UK has buoyed confidence amongst upscale Hong Kong and Chinese hoteliers. As a result the number of Hong Kong and mainland Chinese hotel brands will more than double over the next three years with London being the primary focus.
■ Given the accelerated growth forecast in independent travellers from the country and their focus on price, there may be opportunities for mid-market and budget brands from China to enter the UK market. This, however, is unlikely to happen on any significant scale as the number of Chinese visitors may not be at a level to underpin demand for a brand with little or no exposure outside their home market.
■ Rather than expand existing brands into new markets our expectation is that brand acquisition and direct asset purchases by Hong Kong and Chinese investors will be more prevalent. Prime examples of this include New World Hospitality's acquisition of the US Rosewood Hotel brand in 2011 and the recent purchase of the Paris Marriott Champs-Elysées by Kai Yuan Holdings for US$468 million.
■ We expect this growing appetite for hotel assets could mean that transaction volumes by Asia Pacific investors in the UK could reach £500 million per annum by 2015.
■ This level of activity would make this group significant purchasers of UK hotels. Over the longer term it may even offer opportunities for new brands and concepts from the region to enter the UK market.
.jpg)
.jpg)