Starwood Hotels & Resorts Worldwide Inc. (HOT), owner of the St. Regis and W brands, may consider listing in Shanghai if foreign companies gain approval as it expects China to overtake the U.S. as the world’s biggest hotel market.
“If tomorrow, listing here is an easy thing to do, would we consider it? Yes,” President and Chief Executive Officer Frits van Paasschen said in an interview in Shanghai yesterday. “I wouldn’t rule it out.”
Global companies ranging from Coca-Cola Co. to HSBC Holdings Plc have said they are interested in listing in China’s stock market, the world’s third-biggest by market capitalization. China is “coming closer” to starting a board for the listing of overseas companies in Shanghai, Shang Fulin, chairman of the China Securities Regulatory Commission, said on May 20.
China’s hotel market may eventually exceed the U.S, said van Paasschen, who has been in the country with his executives since June 8 to assess the industry and meet local developers.
“In 10 years or 15 years, if GDP is approaching that of the U.S., the hotel market should be as large,” he said.
About one in three hotels the White Plains, New York-based company is opening over the next three years will be in China, he said. About 90 of its hotels are under construction in the nation, or 30 percent of its pipeline of 300 properties, he said.
Van Paasschen said he isn’t too concerned about potential asset bubbles in the world’s second-biggest economy because there is less leverage in China than in other countries and primary demand for real estate remains strong.
Starwood shares have declined 6.9 percent this year in New York trading, compared with a 4.9 percent gain for the Standard & Poor’s 500 Index. The Shanghai Composite Index has dropped 0.2 percent.
