Major brands like Four Seasons are seeing increased investment from foreign investors.
One thing I love about my job in luxury PR is following travel industry trends in the US and worldwide and tracking their evolution. Recently, I was named Editor-At-Large for Luxury Hotels of America, a publication read by over 40,000 affluent Chinese travelers. With this in mind, I’d like to take a look at a burgeoning trend in China: private equity ditching budget travel and funneling investments into the luxury hotel sphere.
A recent Wall Street Journal article explores this new trend and explains that Chinese investors are looking for more creative ways to capitalize on the country’s growth in travel and tourism. Naturally, luxury hotels would be a terrific area for investments!
Luxury Hotel Expansion in China
Although my own column for Luxury Hotels of America focuses on travelers inbound to US hotels, I find it fascinating to explore new trends abroad especially as China’s economy is inextricably linked with our own. In some cases, there is even overlap. A Chinese conglomerate private equity firm purchased majority stakes in a hotel brand in China that was owned largely in part by Morgan Stanley, the US giant.
Although luxury hotel expansion is happening in China, there’s nothing being developed to rival the five star brands that have become synonymous with “luxe for life” in the US. Our boutique agency has worked with many of these distinctively US luxury hotel brands, like The Four Seasons and Trump International, and from personal experience we can tell you that these brands have solidified their place in the luxury five star hotel sphere.
The author of the article notes, “the few Chinese domestic luxury brands that exist operate as individual boutique hotels and have yet to get backing from prominent private equity firms.” That said, the luxury travel landscape is shifting dramatically in China and investors are favoring the affluent market over the budget route.
Founder Tracks Economic Changes
Tracking large-scale private investments and M&A is vital for staying abreast of economic trends that impact the travel industry. In addition to the traditional travel investments such as hotels and airlines, private equity firms in China appear to be exploring less conventional areas such as travel agencies, tour operators and cruise ships.
Who knows what the future will hold for international travel; however, we will be here keeping you up to date!