In the first half of 2006, China’s hotel and catering industry kept fast increase and the management level improved continuously. According to relevant statistics, China’s retail sales of hotel and catering totaling amounted to RMB493.86bln in the first half of 2006, increased RMB65.4bln year-on-year, up by 15.3%. It was 2 percentage points higher than increase of total retail sales of consumers goods and constituted 13.5% of total retail sales of consumers goods, meanwhile 2.03 percentage points of increase drew and contribution ratio was 15.3%.
　　
Retail sales in the first quarter was RMB254.17bln, up by 14.2% year-on-year, constituted 51.6% of the first half; retail sales in the second quarter was RMB238.69bln, up by 16.5%, constituted 48.4%. Out of which retail sales of Jan reached a new high of RMB93.45bln, up by 16.2%; retail sales of May and Jun both increased 17%, amounted to RMB82.9bln and RMB80.09bln, ranked top 2 and 4 in the first half. Retail sales of Feb was RMB82.57bln, up by 9.8%, ranked top 3, followed by Mar and Apr, with RMB78.15bln and 75.7bln, up by 16.8% and 15.4% respectively.

Operation of above designated size enterprises increased from a steady level. Turnover of China’s star level accommodation enterprises and above designated size catering enterprises totaling was RMB141.62bln, up by 14.3% year-on-year, lower 1 percentage point than turnover of all accommodation and catering enterprises, constituted 28.7%. Out of which turnover of star level accommodation enterprises was RMB68.97bln, up by 14.1% year-on-year and turnover of above designated size catering enterprises was RMB72.64bln, up by 14.5%.
　　
In the first half of 2006, absorption of foreign fund in hotel and catering industry increased greatly, with 536 newly established foreign invested enterprises, decreased by 4.5% year-on-year; contractual value of foreign fund was US$1.43bln, up by 15.6%, actual use of foreign fund was 380mln, up by 48.6%. Out of which there were 143 accommodation projects which was the same as previous year, while actual use of foreign fund soared by 93.6%, amounted to US$250bln and there were 393 catering projects, decreased by 6.4%, with US$130mln actual use of foreign fund, up by 3.6%.

In general, China’s overall scale of hotel and catering industry in the first half promoted from a steady level, with fast increased operating level, quickened chain development and strengthened industrial centralization. Investment of accommodation turned into internationalization, chain hotel and collectivization of hotel process fastened and economical hotel developed greatly. Catering industry represented more obvious characteristics on brand specialization, operation industrialization, enterprises diversification and store miniaturization. Private-owned economy played predominant role in catering market diversification and individualization tendency further strengthened. Though labor cost of accommodation and catering was low, the operating cost was high, additional value of product was low, therefore profit gaining capability of enterprises decreased continuously as the increasing operation cost and real estate price and further enhanced industrial competition.
　　
As a rule, demand of hotel and catering service in second half of 2006 will be up and sales could be close to RMB598bln. It is predicted that retail sales of hotel and catering in 2006 will amounted to RMB 1,090bln.

(Source: Network Center of MOFCOM)

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