Gladden Hotel is China's first four-star hotel opened in a town. It soon became popular among foreign investors, the local wealthy and government officials.

Mo opened two more five-star hotels in the following years.

International hotel brands such as Sheraton and Sofitel also entered Dongguan two years ago.

Beyond Dongguan

Li Shannu, director of Guangdong Dongguan Tourism Bureau, likes to sit in the Dongguan hotel lobbies and observe where the guests come from.

"I am always amazed by the variety," Li says.

Chinese mainland guests only account for 38 per cent, with 35 per cent foreign and 27 per cent from Hong Kong, Macao and Taiwan.

"Our hotels do not just serve Dongguan," Li says. "People who are only 150 kilometres or within a two-hour drive to Dongguan should all become the primary customers for Dongguan's hotels."

It takes about one hour to drive from Shenzhen and Guangzhou to Dongguan. The 24-hour border crossing at the Lok Ma Chau/Huanggang checkpoint between Hong Kong and Shenzhen also facilitates Hong Kong business people's travel to Dongguan.

The transportation network and lower hotel rates in Dongguan help the local hotels attract "spill-over" guests from Guangzhou and Shenzhen.

Royal Garden Hotel, a five-star hotel opened last January, filled more than 4,000 rooms each priced at about 900 yuan (US$115) during the Canton Fair, or Chinese Export Commodities Fair, held in Guangzhou in October.

The average rate of a five-star hotel room in Dongguan is about 700 yuan (US$90), while the price for a similar room exceeds 1,000 yuan (US$128) in Guangzhou and Shenzhen. The price in Hong Kong is several times that in Dongguan.

"Given the lower costs in Dongguan, our hotels are very competitive in price if we can provide individualized and efficient service at lower prices," says Mok Ho Tong, chairman of Sangem Group.

Mok has opened two five-star hotels in Dongguan. The hotels, called Goodview Hotel, are well known for their blend of modern architecture and the views of lakes and mountains.

"Many of our guests come to attend meetings in Hong Kong. They usually stay at our hotel first after getting off the plane and go to Hong Kong at the last minute," Mok says.

There are currently 40 four- and five-star hotels scattered throughout Dongguan's city centre and its 20 towns.

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