SOEs check out of hotel business
Updated: 2011-08-05 07:55
By Bao Chang (China Daily)
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BEIJING - Stated-owned enterprises (SOEs) are stepping up the divestment of more than 100 billion yuan ($15.53 billion) worth of hotel assets to comply with government directives to focus on their core businesses.
China Mobile Ltd, the largest mobile service provider in the country, handed over its unit, Chongqing-based Li Yuan Hotel, to China National Travel Service (HK) Group Corp (HKCTS) on Tuesday.
The transfer was "for free" and more hotels from other SOEs "will be transferred to our company, as the government's policy of concentrating the utilization of State-owned assets" is carried out, Wang Hongbo, a spokesman at HKCTS, told China Daily.
In 2010, the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council ordered a restructuring of hotel operations among SOEs. Under that policy, any SOE not having tourism as a major business line was to get out of the hotel industry within three to five years.
Under the SASAC directive, hotels were to be transferred to SOEs with substantial hotel and tourism operations, and other SOEs were barred from establishing new hotels or restaurants without SASAC's approval.
Chinese media reports said that almost all of the 128 centrally owned SOEs had ventured into the hotel industry over the years, with more than 2,000 hotels representing aggregate assets of more than 100 billion yuan. China Railway Group Ltd (CRECG) listed its two hotels on the Chongqing United Assets and Equity Exchange on Tuesday, offering a 100 percent stake in each hotel.
"The transaction hasn't been completed and the move is to adjust our company's strategy according to SASAC's strategy", the Securities Times quoted an executive at CREC as saying.
In May, Sinosteel Corp put its subsidiary - Foshan, Guangdong-based Jing Yue Hotel - up for sale in Beijing at a price of 100 million yuan.
According to SASAC, six SOEs including HKCTS, Overseas Chinese Town and China National Cereals, Oils and Foodstuffs Corporation, have been classified as mainly engaged in the hotel industry.
Those SOEs will benefit from the separation of other SOEs' hotel business.
The news portal China.com cited cited Zhang Xuwu, chairman of the board at HKCTS as saying that as of the end of 2010, HKCTS had taken over 20 to 30 hotels separated from other SOEs.