SOEs under Central Government administration (central SOEs) will pull back from the hotel industry in succession in the next five years, according to a regulation issued by the State-Owned Assets Supervision and Administration Commission of the State Council on January 25. At present, the 129 central SOEs manage more than 2,000 hotels with a total value exceeding 100 billion yuan ($14.6 billion). 

The central SOEs that do not run hotels as their main business are not permitted to build new hotels and are required to dispose of their current hotels in the next three to five years. Their options include selling their hotel assets or transferring the assets through purchase agreements or open market operations to central SOEs whose business is focused on the hotel industry.

Analysts said the efforts were meant to make hotel-focused central SOEs stronger and more competitive in the domestic market. Currently in metropolises such as Beijing and Shanghai, the high-end hotel business is carved up by overseas hotel tycoons, such as the French Accor and the Malaysian Shangri-la Asia Ltd.

Some central SOEs have already started the asset sale and transfer process. According to the Beijing News, the core assets of 200-plus hotels under the management of China National Petroleum Corp. have been transferred to its subordinate company, Soluxe Hotel Group, which now owns over 60 hotels.