Hoteliers from smaller cities gain from stimulus moves

Hoteliers in secondary cities are benefiting more from China's stimulus measures, with larger markets in Beijing and Shanghai weighed down by past construction booms, said Jones Lang LaSalle Hotels on Friday.

Tier-two and tier-three cities are benefiting from massive infrastructure spending, while the massive hotel expansion ahead of the 2008 Olympics saturated the Beijing market, said Andreas Flaig, Beijing-based managing director at the consultancy, a unit of Jones Lang LaSalle.

From 2006 to 2008, the number of hotel rooms doubled in Beijing and will grow another 23 percent through 2011, said Flaig. That buildout has pushed occupancy rates in Beijing to 47 percent for five-star hotels, and 50 percent in the four-star market.