Root Causes of New Hotel Opening Delays in Greater China a Hospitality Industry Perspectives By Gert Noordzy, MBA, CAPM & Richard Whitfield, PhD First Published by The Center for Hospitality Research Cornell University – School of Hotel Administration 1
41
Embed
Root Causes of New Hotel Opening Delays in Greater China
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Root Causes of New Hotel
Opening Delays in Greater China
a Hospitality Industry Perspectives
By Gert Noordzy, MBA, CAPM & Richard Whitfield, PhD
First Published by
The Center for Hospitality Research
Cornell University – School of Hotel Administration
1
Introduction *
• Educational and professional background.
– “Nothing at hotel school had prepared me for the
rigours of opening a new hotel.”
• Previous and current jobs.
• How did I get into project management?
– “I used to be an accidental project manager.”
2
My Current Job
3
New Hotel Openings *
• This presentation will talk about an industry which
does not apply and has not embraced project
management. Yet.
• New hotel openings in China are almost always
delayed.
Are you surprised?
4
Global travel & tourism industry *
2012 Contribution
GDP US$ 6.6 trillion or 9.3% of total world GDP.
Employment 216 million jobs or 8.7% of total world
employment.
Capital investment Attracted US$765 billion or 4.7% of total global
investment.
Hotel pipeline
5
China travel & tourism industry
2012 Contribution
GDP ¥4.7 trillion (US$ 717 billion) or 9.3%.
GDP growth Average of 8.7% over next 10 years.
Employment 64 million direct, indirect, induced jobs or 8.3% of
national employment.
Employment growth 10 million direct over the next 10 years.
Capital investment ¥655 billion (US$98 billion) or 2.8% of total
investment.
Capital investment
growth forecast
9.2% per annum over the next 10 years to ¥1.68
trillion (US$252 billion) by 2023. 6
China travel & tourism industry
2012 Contribution
Domestic trips 3 billion travelers.
Inbound trips 133 million visitors.
Tourism revenues US$ 412 billion.
Global ranking Second.
By 2023 China will overtake US as largest country in
terms of tourism & travel contribution to GDP
and size of outbound market.
7
China travel & tourism industry
Infrastructure
Express Way
System
3 million KM length by 2020.
High-speed Rail
System
30,000 KM connecting 250 Chinese cities by
2020.
Airports
Currently 195, with plans to build 97 more
before 2020.
8
China Hotel Development
• Implication: 3 new 150+ room hotels will open in
China every day for the next 25 years!
Hotel room inventory
Current * 2.3 million.
By 2025 6.1 million.
By 2039 9.1 million.
9
China Hotel Development
10
China Hotel Development
• Differences with US:
– US growth was less steep and took place over a
longer period of time.
– Several major hotel management companies
achieved current size through acquisition.
– The bulk of the openings in China will be
achieved through new built projects.
– Branding: North America 66% of inventory is
branded vs 22% in Asia.
11
China Hotel Development Pipeline
2012 Asia Pacific pipeline *
• Total:
– 2’401 projects
– 557’505 rooms.
• China:
– 1’622 project
– 407’721 rooms.
12
China Plans of Major Industry Players
Synopsis
IHG “Eightfold increase in rooms in Greater China in the next 20
years.”
Hilton “Quadruple the number of hotels in China before 2014.”
Marriott “Invest US$ 2B over the next three years to open new hotels
globally, 14% in China .”
Wyndham * “Our long-term vision is to have a footprint in China that rivals
our presence in the US.”
Accor “Open 100 hotels in China in the next 2-3 years, network of
400 hotels by 2014.”
Starwood “Open 20 new hotels in 2013.”
Home Inns “Plans to add 330 to 360 hotels annually in the coming three
years.” 13
China Pipelines of Top 10 Hotel Groups
14
Key questions *
1. How do international hotel companies talk individual
owners into signing up with them?
2. How can international hotel management companies
execute their aggressive growth plans?
3. How can hotel operators open new properties on this
scale effectively and efficiently, and in a consistent
and predictable manner?
15
How to open a hotel - Comparison
APM Bok V6 Project Lifecycle
1. Project Brief
2. Capturing project requirements
3. Preparing a business case
4. Securing corp. agreement & funding
5. Developing and implementing a
management plan for the project
6. Leading motivating project delivery
team
7. Managing the risks
8. Monitoring progress against plan
9. Managing the project budget
10.Maintaining communications with
stakeholders and the project
organisation
11.Provider management
12.Closing the project
Typical Hotel Opening in China
1.
2. Limited to hotel system standards.
3.
4. N.A.
5. Limited to hotel critical path only..
6. Limited to hotel team only.
7.
8. Limited to hotel opening efforts only.
9. Limited to hotel expenses only.
10. Limited extend.
11. Limited extend and HOES only.
12.
Hotel openings – status quo
• Project Management methodology and standards are
not applied in hotel industry!
• Use of isolated elements perceived as PM, such as