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PolyU study finds strategic planning needed for Chinese hotels

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December 24, 2013

PolyU study finds strategic planning needed for Chinese hotels

Hoteliers in China are optimistic about the future of the Chinese hotel industry but there is still much to be done before China can become the world?s top tourist destination, according to Dr Kam Hung of the School of Hotel and Tourism Management (SHTM)
at The Hong Kong Polytechnic University. In a recently published research article, Dr Hung identifies the strengths, weaknesses, opportunities and threats associated with the hotel industry from the perspective of Chinese hoteliers. Her findings will provide the government with a better understanding of the issues that need to be tackled so that a strategic plan can be developed to direct future activities and improve performance.

China is an increasingly popular tourist destination. It is currently the third most visited country in the world, and the United Nations World Tourism Organization predicts it will become the most visited by 2020. Unparalleled demand has led to rapid growth in the number of hotels. In 1981, during the early years of economic reform, the country had only 296 hotels. With the emphasis on hotel development in the Fifth Five Year Plan (1981-1985), that number increased dramatically to 300,000 by 2009. Dr Hung acclaims these achievements as ?worthy of celebration?, but notes that the industry still has a number of shortcomings to overcome.

To develop effectively in China, the hotel industry needs proper planning to ?utilize its strengths and opportunities? and ?alleviate weaknesses and threats?. With that purpose in mind, Dr Hung set out to ?help policy makers better understand the hotel industry in China and strategically plan hotel development accordingly?. To gain the most compelling insights into how the industry operates she sought the views of not government officials but hoteliers.

The first step in strategic planning is to understand the business environment. SWOT analysis is a simple analytic tool that can be used to examine the strengths, weaknesses, opportunities and threats facing an organisation. It is widely used to assess hotels in other parts of the world, but infrequently in China. Dr Hung formed focus groups with 47 hoteliers from 37 hotels in mainland China, asking them to brainstorm the strengths, weaknesses, opportunities and threats they had encountered or were aware of in the Chinese hotel industry.

Six groups were formed, with seven or eight participants in each. The average length of time the participants had worked in the hotel industry was over 11 years, in positions ranging from hotel trainee to president of a hotel corporation. Analysis of the discussions allowed Dr Hung to identify relevant information and classify it into the four SWOT categories, and then compare the contents of the different focus groups to identify the important themes in each category.

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Source PolyU,

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