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Hospitality giants bet big on China
The Chinese economy may be slowing but tourist numbers are still growing, prompting international hospitality giants to place bullish bets on the sector by opening new hotels and cruise routes.
Marriott International (MAR) and Royal Caribbean Cruises (RCL) are among companies looking to cater to a rapidly growing number of wealthy Chinese who are not only spending more at home but also flocking overseas, executives from the companies told CNBC.
"Outbound Chinese travelers are still growing faster than the economy in China, so we don't see the same thing that everyone is talking with the economy happening with the Chinese travelers," said Marriott International's president and managing director for Asia Pacific, Craig Smith.
Over the week-long Lunar New Year holidays, room revenue growth in Marriott resorts within China rose 12 percent from a year ago, Smith told CNBC's Squawk Box on Wednesday.
To target fast-growing middle class Chinese who will not just need leisure but business accommodation, Marriott and China's Eastern Crown Hotels signed an agreement recently to open 100 mid-scale Fairfield by Marriott hotels in mainland China by 2021. Another 40 hotels are slated to open later.
As for outbound travel, Chinese tourists undertook more than 120 million trips overseas in 2015, according to the China National Tourism Administration. That number is expected to grow by 11 percent this year, Smith added.
To tap this growing market, Royal Caribbean Cruises will in April launch cruise ship Ovation of the Seas, with Tianjin as the home port.
Royal Caribbean is upbeat on the nascent cruise industry in China even though it is likely to capture just a fraction of the vacation traffic-typically 2 percent globally-said president and chief executive officer of Royal Caribbean Cruises, Adam Goldstein.
With over 100 million outbound departures a year, there are "not enough ships based in China right now ... to even take 2 percent of the outbound travelers".
There are just about one million cruise passengers in China now, he added
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