Although the winds of change ripple through China’s hotel industry, many properties are still owned by the local or regional government and are operated on a noneconomic basis. Often, local officials have arranged for construction of the state-owned hotel (SOH) for their own reasons, including improving the image of their town or their own enjoyment. In such an environment, a hotel’s management team may have to pay more attention to the whims of local officials than to the demands of the market. The situation of the SOHs calls for privatization, but the method of exit from state control to private control is not clear.
Jaksa Kivela and Lin Fung-Lin Leung, “Doing Business in the People’s Republic of China,”Cornell Hotel and Restaurant Administration Quarterly46, no. 2 (May 2005), 125-152.
2.
Pine, “China’s Hotel Industry,”63-63.
3.
Yan Chen and Fang-Fang Tang, “Learning and Incentive-compatible Mechnisms for Public Goods Provision: An Experimental Study,”Journal of Political Economy106, no. 3 (June 1998).
4.
During the central-planning stage, employees received various fixed salaries, no matter what their working performance was. A heated debate occurred through the early 1980s, up to the central government level, as to whether better performance should be rewarded by some extra bonus.
5.
See Thorstein Veblen, Absentee Ownership and Business Enterprise in Recent Times (New York: A. M. Kelley, 1923).
6.
See Zong Wai Jiu Dian [Sino-Foreign Hotels], September 2002.
7.
See, for example, Masahiko Aoki, Information, Corporate Governance, and Institutional Diversity: Competitiveness in Japan, the USA, and the Transitional Economies, trans. Stacey Jehlik (Oxford: Oxford University Press, 2001).
8.
See Zong Wai Jiu Dian, May 2003, 62.
9.
See 2004 China Hotel Business Statistics (Beijing: China Tourism Hotel Association, 2005), 4-4.
