A Hong Kong-based investment firm is buying the only five-star hotel on Paris’s coveted Avenue des Champs-Elysées as it bets on a growth in high-end Chinese tourism to the city of light.
Kai Yuan Holdings said that it would acquire Marriott Hotel Champs-Elysées for €345m, according to a stock market filing in Hong Kong on Monday night. The deal sent its share price soaring more than 60 per cent.
Paris has long been among the world’s most visited cities and France last year attracted 83m tourists. But the move highlights the growing importance of China to tourism in the world’s leading cities.
Last year, a record 1.4m Chinese tourists descended on the French capital.
The company, which is mainly involved in manufacturing and trading steel and supplying energy to Chinese cities, is buying the hotel from MCE PropCo, a French real estate company.
Kai Yuan Holding said that on completion of the deal it would start to target Chinese visitors to add to the hotel’s mainly US, Saudi Arabian and French clientele.
“The group believes there is potential to attract more Chinese customers and further improve the current occupancy rate,” it said in the filing.
It added that it was looking to diversify its revenue stream and take advantage of the expansion of global tourism, which grew 5 per cent last year.
In the past few years, the sight of Chinese tourists laden with shopping bags from some of the world’s biggest names in luxury fashion and accessories has become almost as commonplace as the local boulangerie.
Parisian businesses have responded accordingly. Galeries Lafayette, the upmarket department store, for example, has hired Chinese-speaking staff and set up special assistance for the busloads of Chinese tourists that pile into spend their money.
But, while many Chinese tourists are willing to spend on luxury goods, fewer have so far been prepared to pay for luxury accommodation: according to one Franco-Chinese tour operator based on the Champs-Elyseés, most Chinese tourists usually spend between €2,000 and €3,000 on their holiday – barely a third of what they spend on luxury goods during their stay.
Kai Yuan Holdings believes that that will start to change. It said the deal would complete by September 5 at the latest.