A rising demographic of middle-class travelers, coupled with a government push to modify mandated holiday travel, has hoteliers in China and neighboring countries adapting.

　　China’s economic growth slowdown is dominating the conversations surrounding hotel investment and performance in the Asia/Pacific region. But China’s economy hotel segment continues to press forward and a wider midscale segment is beginning to emerge.

　　In fact, the overall effects on the hospitality industry from the slowdown in economic growth would seem overemphasized, as previous double-digit percentage growth has been reduced to single-digit growth. Existing growth is of course something many other countries would thankfully accept. Gross-domestic-product forecast is also showing a continued growth at approximately 7% moving forward.

　　The slowdown in growth, including imports and exports to and from China, could have an economic domino effect on neighboring countries. However, that is expected to be offset to a certain extent by more Chinese traveling outside their home country. A rising middle class in China means residents have more financial resources and the ability to take more leave. The Chinese government’s case when creating extended Golden Week holiday periods is again heavily debated among citizens and tourism organizations, with hot topics including perceived macro-level gains and adapting to the increased freedom to travel as a whole.

　　We are also yet to see the effects of some new initiatives put in place, such as the Shanghai Free Trade Zone, launched late in the third quarter of this year as an effort to create a new financial services hub in the country and wider region.

　　Furthermore, China recently launched the 72-hour Visa-free transit in order to facilitate global visitors’ shorter stays for sightseeing and bolster tourism spend in Beijing, Shanghai, Guangzhou, Chengdu and Chongqing. These five cities adopted a Visa-free transit policy in 2013, which allows transit passengers with passports from 45 countries to stay for up to 72 hours without Visa on direct transit.

　　Getting to know Chinese travelers

　　Now that the Chinese have more freedom to travel, Thailand is already seeing a great effect. The country is experiencing massive revenue-per-available-room increases, partially attributed to incoming Chinese visitors. As an example, one in 10 foreign travelers into Pattaya today is from China (still well behind Russia, which represents one-third of all international Pattaya visitors).

　　Inter-Asia/Pacific travel as a whole is growing dramatically. And when the Chinese start to travel, the mere size of their population causes other countries to adapt. But it works both ways: Countries need to understand what it’s like to be a Chinese traveler, and Chinese travelers need to learn how to adapt to other cultures when traveling. Examples of amenities/services that the Chinese travelers would expect in a hotel are: free Wi-Fi, smoking rooms, Chinese breakfast food and Chinese TV channels.

　　China is a highly mobile country. Mobile and handheld devices were rapidly adopted. Therefore, how Chinese travelers book hotel rooms has shifted. Booking sites—both brands and third parties—are adapting.

　　For example, when Ctrip, the market-leading Chinese-based online travel agency, saw growth declining that ultimately affected the company’s overall valuation on the stock market, it shuffled leadership and, among various efforts, launched a new app and new solutions addressing the mobile consumer. The company has since nearly doubled its value and now hoteliers and consumers are seemingly back on board. Mobile commerce in China is absolutely critical, arguably even more so than in the United States.

　　To house the growing middle class, Chinese developers are adapting their strategies. Budget brands are focused on second- and third-tier cities, while developers in primary cities are trending more toward midscale hotels.

　　But it takes a certain hotelier to understand how midscale hotels work. What won’t work is taking a budget product, doing a soft refurbishment, raising the average daily rate and calling it midscale. This has proven to be a challenge for some hotel owners.