Purpose: The purpose of this professional paper is to identify why China is currently the number one recipient of foreign investment from foreign multinational luxury hotel companies.Statement of Objective: An exploratory study will be conducted in support of the purpose. With such a lack of available information relating specifically to luxury hotel development in China; published data on the current economic, cultural, and tourism environment in China will be used to support conclusions made in regard to luxury hotel development by multinational hotel companies.Justification: Deng Xiaoping’s introduction of the Open Door Policy in 1978 opened the door to what would become decades of unprecedented economic growth in China’s history. Riding along the waves of new found economic liberty and the freedom to partner with foreign investors, China’s hotel investment community seized the opportunity to welcome outside investment. The hotel industry in China quickly developed from 137 properties in 1978 to 14,237 properties in 2009. One of the main catalysts of the rapid development seen in the hotel industry has been the expansion of multinational hotel groups into China (Zhang, Guillet, u26 Gao, 2011).The outlook for international tourism in China remains extremely positive. In a 2010 study conducted by the World Tourism Organization, China was listed as the fourth most popular international tourism destination (in terms of arrivals) with 133 million visitors. The number of international visitors to China is expected to increase to 137 million by 2020. As positive as these numbers seems, they are dwarfed in comparison to the 2+ billion people participating in leisure travel within China already.Currently, there is little information available on what makes China an attractive target for foreign multinational luxury hotel companies. This paper will serve to address the void of information relating to this specific issue.
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