Chinese Budget Hotels: Strategy and Analysis

This dissertation examines the budget hotel industry in China within the context of its present business environment to determine what strategy is likely to be suitable for the future. China’s hotel industry has really existed since 1978 when the open door policy of the government in China started to attract substantial international tourists. Additional impetus for growth in tourism that has had a direct impact on demand for budget hotels was the booming domestic economy and encouragement of domestic tourism for nationals in China. The World Tourism Organisation forecasts that China will become the number one tourist destination in the world by the year 2020 and this means that demand for budget hotels will continue to present a steady increase. Budget hotels are doing well in China despite the current global recession which has affected luxury hotels and these hotels are generally better managed than the state owned hotels, offering quality at remarkable prices compared to other nations.