Due to the recent slowdown in economic growth for China, companies like the HNA group, and China Travel Academy are doing their best to make sure that with the recent spike of Chinese tourism to America, will benefit China as much as possible. China sees the hospitality industry in America a safe place to invest because of China's recent influence on tourism, and thus airline and insurance industries, are looking to invest in American hotels.
"In April, an HNA division announced it was buying Carlson Hotels, which owns Radisson and several other brands. Last month, Anbang Insurance Group completed the purchase of 15 American hotels in a deal worth more than $5bn, including the JW Marriott Essex House in New York, the Westin St. Francis in San Francisco, the InterContinental in Chicago, a Four Seasons in Washington, DC, and two Ritz-Carlton resorts. And just last week came the news that China Life Insurance Co. is leading an investment group that is buying a $2bn stake in a collection of 280 American establishments."
The two reasons given for this surge in investment is that (1) the slow in growth in China is frustrating and prompting investment abroad, and (2) vertical integration in the tourism industry is expected to have a large impact on travel.
In all China's investment is hoping to catch and return as much abroad spending as possible back to their own economy, further improving their growth. This also means that the US economy is not reaping all of its rewards for the hospitality industry it has created, and our growth may be slowed as a result.
http://www.economist.com/blogs/gulliver/2016/10/rooms-growth
I think it's interesting that China decided to invest in Hotels than any other form of investment. However, after reading he article from the Economist, China is expecting such a large surge of travelers from their country to ours they are essentially relying solely on the expectation that people will leave. Also, with the upcoming election, nobody knows what immigration policies are going to be implemented over the next year which could significantly affect the tourism which is what China is hoping will surge.
ReplyDeleteProgress is the operative word all nations want to see at a positive incline. Growth should never be stagnant. It only leads to disaster. China sees an opportunity to counteract its stagnation at home, by investing abroad. It's ingenious.
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