Jones Lang LaSalle Hotels (JLL), the world's leading hotel investment services group, has further strengthened its presence in China by upgrading its long-established Beijing office with a team of five bilingual members of staff.

The consulting firm, which already has 19 offices in 12 countries, plans to open a branch in Shanghai at the end of this year, according to senior company officials.

"After that, we will expand to some second-tier cities, as more international hotel management firms plan to invest in China and Chinese domestic companies are also investing beyond the country," said Michael Chin, the company's executive vice-president for the China region.

"Within five years or less, China will become our largest operation in Asia, and quite possibly in the world," added David Gibson, international director and chief executive officer of Asia-Pacific, based in Brisbane, Australia.

"We may also build our Asia-Pacific headquarters in China," Gibson said. Over the past three years, the UK-US joint venture has served clients in

many Chinese cities - including Beijing, Shanghai, Dalian, Xiamen and Hainan - carrying out feasibility studies, valuations, strategic research and consultation, mainly with the help of its professional teams in Hong Kong and Singapore.

JLL's global business has tripled in the last three years, with 2004 proving to be a year of records. The firm helped complete 99 transactions across the world with an investment value of US$5.2 billion, of which 48 were in Asia-Pacific with a combined worth of US$1 billion.

Asia-Pacific, especially China, will become its major revenue source in the next few years, the company said.

"We have a long-term commitment to China and we are very optimistic about our business future and China's hospitality industry development in the years leading up to, during and after the 2008 Beijing Olympics," Chin said.

Part of the firm's strategy hinges on the fact that many international hotel management groups are looking for opportunities to establish a presence in China, particularly in the two years before the 2008 Games.

The past two years saw very active foreign investment in China's hospitality industry, mainly from international companies based in Asia, and mostly in direct funding.

"If China sets up a clear REIT (real estate investment trust) structure and provides favourable tax policies, a lot more capital will come in the future," said Gibson.

As the 2008 Olympic Games approaches, China's tourism sector has been growing very quickly, with 109 million international arrivals and 1.1 billion domestic travellers in 2004. This has naturally benefited the development of the hospitality industry. Five-star hotels in Beijing achieved an average occupancy of about 56 per cent with an average room rate of about US$120 in the first two months of this year, while the figures for Shanghai were better still at 61 per cent occupancy at an average US$170.

"Beijing has the potential to challenge Sydney to host the best Olympics," said Gibson. Chinese hotel groups have a great opportunity to expand overseas and make their brands internationally famous, either through joint ventures or co-branding with international hotel management groups.

Source: China Daily