China’s growing middle class is buying new cars and heading off on the country’s freshly built highways. And those travelers want clean, affordable places to sleep. Two U.S. hotel giants are hoping to fill that need, launching midpriced brands in China for the first time to capture part of the fast-growing domestic travel market. Hyatt Hotels Corp. said Wednesday that it plans to introduce two Hyatt Place hotels and one Hyatt House hotel in the suburbs of Shanghai. The first two of the new Hyatt properties are set to open in 2014. Carlson, which owns the Radisson hotel chain, said it plans to unveil its midlevel Park Inn brand in China, although the company didn’t say when the new hotels would open.
Carlson Chief Executive Hubert Joly said the hotel industry in China is at a stage similar to the postwar period in the U.S., when roadside motels of uneven quality were the only choices for travelers. “It’s like the U.S. in the 1950s, when the freeways opened,” he said. “You had this infrastructure that was built and you needed these hotels for the boom in domestic demand.” International hotel operators have been expanding quickly in China, focusing mainly on high-end offerings in big cities frequented by foreign business travelers.
Hyatt said Wednesday that its affiliates plan to add eight full-service hotels in China, including three under the Grand Hyatt brand and five under the Hyatt Regency label. Those high-end properties give Hyatt a total of 32 properties under development in the country, the company said.But now as the Chinese middle class becomes more affluent, operators have shifted their strategy to accommodate them with outlets that will appeal to traveling salesmen and families. “The proportion of intra-China travel is growing,” Hyatt CEO Mark Hoplamazian said in an interview in Hong Kong. “These [new brands] will appeal to young professionals and business travelers who don’t need a full-service luxury hotel.”