The Chinese are on a US buying spree like no other.  Since the beginning of the year, Chinese investors have announced interest in, or closed on, several multi-billion-dollar deals on a variety of American enterprises, including GE’s appliance division, Strategic Hotels & Resorts (owner of numerous luxury properties here and abroad), a construction manufacturer, the Chicago Stock Exchange, Carlson Hotels (owner of the Radisson brand), Hollywood’s Legendary Entertainment Group, Google’s smart phone hardware division (Motorola) and Starwood Hotels & Resorts (ultimately acquired by Marriott International after a heated bidding war). According to the news released, the average deal announced so far this year amounts to $1.5 billion, eight times greater than last year.

 

This year’s pace comes on top of the all-time high, record-breaking $15 billion they plowed into the US in 2015, which was a 30% increase over the previous year.

 

At the top of their investment targets are US companies in the tech, health care and residential and commercial property sectors especially in tourism and hospitality.According to a report,  “investments in 2015 included hotels (among them the Red Lion Hotels, Waldorf Astoria New York, Waldorf Astoria Chicago and the Hyatt Regency Orange County), golf courses (including more than 20 Myrtle Beach golf courses in South Carolina) and travel logistics (such as new operations by Hainan Airlines in San Jose).”

 

 

Meanwhile, news reported that, after having invested more than $110 billion in US real estate over the past five years, Chinese nationals are today the largest international buyers of US residential and commercial property.  And there’s no end in sight. Chinese US property investment is expected to double to $218 billion in the second half of this decade. 

 

Big property deals such as Anbang insurance group’s offer for Starwood make a lot of noise, but the Asia Society study points out that residential purchases by the Chinese has far outpaced their investment in commercial land and buildings.

 

 

Over the past five years, Chinese buyers spent about $17 billion on US commercial real estate while spending roughly $93 billion on homes in the US over the same period.  Last year they paid about $832,000 per US home in high profile cities like New York, Chicago, Miami, Los Angeles, Las Vegas and San Francisco.

 

News indicated that Chinese purchase of residential property is primarily motivated by a desire for second homes; primary residences for those moving to the US on EB-5 investor visas or as rental or resale investments.  Concerns about the stability of the renminbi exchange rate have accelerated the pace of Chinese commercial investment abroad since the middle of 2015.

 

100 million mainland Chinese travelers expected to visit the US annually by 2020 it’s clear the US travel and hospitality industry and business community at large need to prepare for a changing landscape.

 

 

For the travel and hospitality industry, it won’t be long before we see mainland Chinese hoteliers exporting their national lodging brands to the US and other countries to complement the high-profile global brands in which they’ve invested.  As their countrymen increasingly travel the world, just like generations of Americans and Europeans before them, they will want to stay in hotels with which they’re familiar back home.  Soon, it will be commonplace to find hotel brands developed by hoteliers like Jinling Hotels & Resorts or Jin Jiang International Holdings sitting side by side US brands like Hilton, Sheraton, Hyatt or Marriott in cities throughout the US.

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