Wednesday, June 25, 2008

Olympics Coming, and Rooms Are Available



June 24, 2008
China's Visa Policy Threatens Olympics Tourism
By DAVID BARBOZABEIJING

The plush lobby of Beijing's Kerry Center Hotel is usually crowded with foreign guests, many of them listening to jazz and sipping martinis in Centro, the hotel's fashionable bar, or lining up for taxis after dinner at the Horizon restaurant.

But Thursday evening, Centro had only a sprinkling of guests in a hotel whose occupancy rate is typically close to 100 percent this time of year. That night, the duty manager, said it was 63 percent."Something strange has been going on," said Sun Yin, the duty manager. "I really don't know what happened."


The New York Times does it again.

Just a few days after publishing one of the more interesting accounts about the intersection of China’s energy policy and its stock market comes this entirely unexpected snapshot of the Chinese economy just prior to the biggest event in the country’s recent history: the Olympic Games.

"Business is so bleak," said Di Jian, the sales manager at the CapitalHotel in Beijing. "Since May, very few foreigners have checked in. Ouroccupancy rate has dropped by 40 percent."

Many other cities in China are also feeling the pain of fewer tourists,including Shanghai, where some hotels say occupancy rates are down 15 to20 percent.

I ran the article by a friend who travels to China every few months—his company’s business depends on China’s manufacturing base—and his response was almost as interesting as the article.

“I think the article is very accurate.”

Read it for yourself. Rooms are available.


Jeff Matthews
I Am Not Making This Up


© 2008 NotMakingThisUp, LLC

The content contained in this blog represents the opinions of Mr. Matthews.
Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.


3 comments:

John Hempton said...

There is a general problem with all long-haul tourism.

The Australian economy - driven by minerals - is still going gangbusters.

Its just that the airlines are all cutting flights - and the long haul flights are particularly affected.

You can look this up with news on Qantas or Virgin Blue.

In Australia they blame the oil price first and the Aussie dollar second.

International tourists in China is almost as long haul as Sydney.

Reissuer said...

John's comments are interesting. Have also felt that at some stage international demand for long haul flights was going to fall off a cliff.

On China, check out these comments by Airport Authority Hong Kong executive director for finance and investment Raymond Lai Wing-chueng (reported today in The Hong Kong Standard whilst commenting on the Hangzhou Xiaoshan International Airport Co expansion and possible IPO):

"Lai said the Airport Authority has slashed its target for passenger growth 50 percent this year, given global economic uncertainties.

'I think this year we will have a much lower growth rate," Lai said. "I think 4 percent; 5 percent maximum.'"

50% - that's quite a drop (full article is here).

And talking of Australia, it will also be interesting to see what the actual visitor numbers turn out to be for the Pope's visit and the World Youth Day, billed as "the largest youth event in the world" (see Web Site) Everyone is being very cagey about actual overseas (or inbound, as it's know in Aussie) visitor numbers. The event is also billed to "... be the largest event Australia has ever hosted. It will attract over 125,000 international visitors - more than the 2000 Olympics."

Keep an eye on the actual numbers...

smithycroftman said...

THe answer could also be political rather than economic, as the Chinese government seeks to limit visas to ensure a stage managed games.
http://www.newsweek.com/id/109600?from=rss

The time to watch is after the games are finished. Both Japan and Korea suffered from the "post-games hangover". China has its hands full with these games, and the devastating earthquake. When they turn their attention back to business and find the American consumer has finally run out of belt notches to let loose, then we'll see just how decoupled Asia really is.