Accor & Hilton Expand in China’s Smaller Cities to Fast-Track Growth

Since the beginning of this year, two major hospitality companies have been actively expanding their presence in China, fueled by the strong growth in domestic tourism and a surge in inbound travelers. Both companies are focusing on opportunities in smaller cities, including third- and fourth-tier locations.

One of these companies currently operates over 830 hotels with more than 140,000 rooms across more than 50 cities in China. The Chairman and CEO shared that several of their mid-range brands are collaborating with local operators, such as H World Group, to widen their reach into less metropolitan areas.

The company aims to double its hotel count in China, targeting 1,600 properties by 2031. Additionally, plans are underway to upgrade and refurbish existing properties, including notable hotels like the Peace Hotel.

This year’s inbound tourism segment for this company on the mainland has seen a 46% increase compared to last year, primarily driven by visitors from Asia-Pacific, the Middle East, and Europe. This growth underscores the company’s recognition of the importance of strengthening its local footprint.

Similarly, Hilton is fast-tracking its expansion across China through its mid- to high-end brands such as DoubleTree by Hilton and Hilton Garden Inn, which are expanding into smaller markets. The President of Hilton China and Mongolia noted that DoubleTree has 116 hotels across the Asia-Pacific region, with 94 more currently under construction. Many of these projects are situated within China, showcasing substantial development potential in the second- to fourth-tier cities.

Hilton Garden Inn is franchised in China to facilitate growth in lower-tier markets, aligning with the company’s asset-light strategy in the country. This brand is poised to play a central role in expanding Hilton’s footprint in these emerging markets.

Nevertheless, analysts emphasize that regional differences in third- and fourth-tier cities can pose challenges for foreign brands, which may struggle to adapt without proper localization. Although the number of hotel projects is expected to grow rapidly in these areas, hospitality companies will need to overcome obstacles in attracting travelers and ensuring sustainable growth.