Peninsula Hotels CEO: oversupply, a major issue in China
Clement Kwok, CEO of Hongkong & Shanghai Hotels, owner of Peninsula Hotels, recently told CNBC that China is the most important market for the hotel industry, however, oversupply was a major concern. The group has hotels in Beijing, Shanghai and Hong Kong, and is eyeing second-tier cities in China for future development, he said.
Kwok acknowledged that the oversupply situation in China, where in Shanghai alone more than 1,000 luxury hotel rooms were added to the market last year, has put downward pressure on the room rates offered at his hotels.
He also highlighted that while a new market was bound to attract an influx of supply, the question of whether or not these hotels would survive comes down to quality. “Who has the long-term staying power? We do not yet know. We are still in the early stages of the game, and there’s still a lot of the game to be played,” he added.