Interstate China Courts Hotel Projects in Secondary Cities

Interstate China Hotels & Resorts is looking to expand across China into secondary cities like Chengdu and Xiamen, by banking on its "highly flexible relationship" with owners.

Roger Fung, executive vice-president of operations at Interstate China said: “Owners have the flexibility of using their own brand name, but they can still be managed by Interstate…This will help those who want to have their own identity or retain their family name.”
 Fung said Interstate’s offerings would also be ideal for secondary cities with its shorter management contract terms of five to eight years, in contrast to the average of 15 years by more established market players.

He said: “Such a flexible management model worked very well in the US in the past. Although this is something new in Asia, I believe this model will work and time will tell.”

Established in 2010, Interstate China is a joint venture between Interstate Hotels & Resorts, one of the largest independent US-based global hotel management companies, and one of China’s leading hotel operators and developers, Jin Jiang International Hotels Company.

Interstate China currently manages 10 hotels, which include Jin Jiang-branded hotels, and five-star hotels, like the Shanghai JC Mandarin Hotel and the DoubleTree by Hilton Hotel Shanghai-Pudong. It has also been appointed to manage the luxury J Hotel Shanghai Tower, China’s tallest hotel, scheduled to open in 2015.

The company aims to add at least 20 to 30 more hotels to its management portfolio in China over the next two years. While there were plans to move into the luxury hotel segment, Fung said the timing was “not right now”.

“We are not aiming to court the big brands now and will be expanding our infrastructure and developing our own Interstate brand first,” he said.