Capacity in the BeiJing hotel market, after the BeiJing Olympics 2008 Dissertation

Capacity in the BeiJing hotel market, after the BeiJing Olympics 2008 - Dissertation Example Beijing is certainly no exception to this rule. It is important, however, that hotel development not result in a prolonged period of excess room inventory. Hotel overcapacity in China, in particular Beijing, has been a concern since the Chinese borders were opened up back in the late 1970s. Since that time, the number of tourist arrivals has increased nearly every year, providing a boon to nearly aspect of the tourist business. As a consequence, hotel development has escalated as well throughout the past four decades. The issue, however, is that it appears that hotel growth has now exceeded the growth in the overall tourist and business travel segment, resulting in sporadic periods of hotel overcapacity throughout the region. Since Beijing was awarded the Olympic games back at the beginning of this century, new hotel developments quickly drew the interest of tourist officials in anticipation of the record number of visitors that would grace the limits of Beijing during 2008. Hotel de velopment increased in fervour, yet the concern remained about overcapacity. The economic ramifications of such a phenomenon is quite serious. If there are simply too many hotel rooms available for a long stretch of time, hotels must lower rates to fill up existing rooms, which cuts into their bottom line. In the end, hotels fail and shutter their doors, leaving vacant buildings scattered throughout the city. This has occurred in other urban areas throughout China, Asia, and the rest of the world. It is a situation the Beijing is desperately trying to avoid. Now that the Olympics are over, it is time to conduct a feasibility study to determine if the numbers of hotels in Beijing are currently at capacity. At the same time, it is important to discuss what would happen if hotels continue to develop at a rate exceeding the number of visitors to the city. That had been the aim and goal of this project. Beijing is a city that has seemingly limitless potential for tourism operators. From the city itself, millions of tourists can find quality lodging and still be able to explore regions outside of Beijing and return the same day. The variety of tourist attractions, world class shopping malls, entertainment facilities have turned it into a regular holiday destination for people throughout the region, Asia, and internationally. As such, the demand for lodging at in the budget and luxury categories alike continues to grow. Developers, however, must be constantly leery of reaching a situation of overcapacity. As Chapter 2 will discuss, other cites throughout China have already experienced the economic ramifications that come with reaching such a phenomenon, so the industry would be wise to consider this