The ancient Chinese philosopher Laozi once said, “A journey of a thousand miles must begin with a single step,” a phrase that is very true of the country today. China is going through unprecedented change, revolutionizing its economy and pushing Chinese society in a direction no one in the country could have dreamed of fifty years ago. People in China are increasingly wealthy, increasingly mobile, and are increasingly looking to take that first step that Laozi so famously described.

For a country that was once closed to all but a few foreign visitors between 1949 and 1974, this is a recent phenomenon. Even after Deng Xiaoping made the decision to promote tourism in the late 1970s to bring in foreign capital, the numbers were low. However, with the ever-growing development of China’s tourism industry and the influx of money pouring into the country in recent years, many locals themselves have lapped up the opportunity to use this newfound wealth to see the country for the first time. Often choosing large group tours and staying in large soulless hotel blocks, they receive the same identical treatment while on holiday. However, with the growing numbers of well-to-do foreign tourists and increasingly wealthy locals both of whom desire the imperial treatment, there is a distinct change in the wind.

Every second counts
In fact, luxury tourism in China has been long in the making. 2012 saw the 20th anniversary of the Kempinski Hotel Beijing. As the city’s first luxury hotel, it was a maverick in its day, catering to both well-heeled domestic and foreign tourists and acting as a definite nod to the future. Its success and the Chinese love of luxury saw the development of luxury and boutique hotels. Domestic tourists in particular have begun to turn away from simply viewing hotels as no more than a place to sleep and have embraced the idea that every part of a holiday should be an experience in itself.

This has led to a wealth of luxury and boutique hotels opening across the country from the JIA Shanghai Hotel in a refurbished building from the 1920s situated in the heart of the city’s shopping district to The Hotel Kapok next to the Forbidden City in Beijing, which boasts a private garden for each room.

With hotel revenue in 2012 worth $39 billion and predicted to reach $56.2 billion by 2017, the hotel business and the luxury sector in particular have entered a new phase of their development. This is a marked change from the humble start under Deng Xiaoping.

Players entering
This has not gone unnoticed, as major international players are readying to enter and increase their presence in China and are ready to cash in on the projected monumental growth of this industry.

Starwood Hotels and Resorts Worldwide, the American hotel and leisure company that runs hotels such as Le Méridien, the Sheraton and the St. Regis, opened its first mainland Chinese W Hotel in Guangzhou this past April. As a luxury boutique hotel brand, W Hotels are generally marketed towards the younger fashionable crowd and W Guangzhou, situated in Guangzhou’s Pearl River New Town District, is ready to welcome China’s growing numbers of luxury tourists. With ten more W hotels said to open in Beijing, Changsha, Shanghai and Suzhou in the next five year, the company is actively looking to expand in China.

Hainan, the tropical southern island known for its ambitious plan to make itself an international tourism destination by 2020, is powering ahead to place itself firmly on the tourism map to attract luxury loving locals and the international crowd. In fact, by the end of 2012, Sanya was already home to 31 international hotels, including the Marriot, InterContinental, Starwood and Hilton Worldwide. Out of these 31 hotels, 23 are five-star establishments—an extremely high percentage for an island once known for its isolation and lack of development.

Emirati company Jumeirah Group, which runs the Burj Al Arab in Dubai, the world’s most luxurious hotel, is another company that opened its first hotel in China in the last few years, in this case the 338-room HanTang Jumeirah located in Xintiandi, Shanghai in July 2008. The company has said it is very keen to expand further into the Chinese market and is a nod to the growing penchant and desire for an expanded luxury tourism industry in the country.

Diversity of locations
Traditionally, international hotel chains favored the eastern seaboard megacities of Beijing, Shanghai and Shenzhen. Kempinski, the German firm that opened the first luxury hotel in Beijing in 1992 and is Europe’s oldest luxury hotel company, currently has 17 properties across China in cities as diverse as Shenyang, Xi’an and Yinchuan.

This diversity of locations away from the eastern seaboard megacities shows how the Chinese luxury tourism industry is spreading across the country as more people not only require but also expect luxury and boutique hotels in cities further inland. Some of the leading luxury hotel companies banking on this trend (and the growth in both travelers for pleasure and for business coupled with rising incomes) plan to open their doors throughout China’s second tier cities. With international luxury players and private boutique establishments making their presence felt, Laozi’s journey is well and truly underway. 

Surpassing luxury goods
In fact, this growing industry is part of a larger trend. The Chinese currently spend more on travel experiences than on luxury goods themselves, which for some could be seen as rather surprising. Already known the world over for their extensive shopping sprees—where flying to Paris, New York or London to stock up on designer handbags, glasses, shoes and so forth is seen as nothing irregular—the money they are now lavishing upon travel experiences is in fact part of a trend. Spending habits have been shown to move on from goods themselves and eventually onto experiences such as travel, which is a significant change in consumer habits as Chinese society evolves at an unprecedented rate. Luxury goods are still highly sought after, but the definition of luxury in China is changing and has influenced the tourism industry.

Even without the impressive numbers of domestic tourists, the country is still highly visited. China is already ranked as the third most visited country in the world (after France and the USA), which is a particularly impressive feat given the low numbers under Deng Xiaoping’s initial tourism drive. Further investment and the continued expansion of the tourism industry into luxury tourism stand the country in good stead to become a firm favorite of both domestic and international travelers. Couple that with everything China has to offer from ancient palaces to spectacular natural landscapes and cityscapes of the future and it is clear that the Middle Kingdom is well and truly on Laozi’s journey of a thousand miles.

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Keywords: luxury tourism in China Chinese luxury tourism