Read Chi-Chu Tschang's BusinessWeek.com article about Beijing hotel occupancies. Some of the things we've been hearing from clients running budget/economy hotels in China is that cities like Shanghai and Beijing are soon becoming too expensive in which to operate. We're still not there yet –maybe another 5-8 years, but these hoteliers worry that soon high land prices might drive them to engage in more of the second- and third-tier cities and flee the big cities of China. As Terry, the editor of our China Hospitality News says: it will become like London and New York where the cities are filled with either expensive options or extremely cheap options, but nothing in between. Rene Peter is the new GM of the Pangu 7 Star Hotel in Beijing, whose rooms are among those that are/will be Beijing's most expensive.

The Olympics are a week over and here are some thoughts and pics from the last week.

Had hotpot for lunch on Friday with colleagues in our Beijing office:

The first few days in Beijing were hazy and gray, but the last few days have been sunny and bright. Too bad all the journalists are either deported, arrested, or already filed their mandatory weather stories so we might not see much more written about the nice days in Beijing.

Beijing was empty. It felt like an early Sunday morning at 05:00 all day, everyday. Just nobody was around. I saw few Chinese on the streets, fewer foreigners, and the only benefit for this was less street traffic. The one place I did see a good deal of foreigners was at the Holland Heineken House in Nongzhanguan. There was a crew from America's NBC television station there, as I assume it was one of the few places where foreigners were congregating in the city. Even at bars and restaurants it just seemed empty.

This is all too bad for the organizers in China. They planned for so many laowai to arrive, but it appears that there just aren't as many people as expected.

I have been to boxing, beach volleyball, and baseball events. At all events the stands were about 60-70% full, but the VIP seats were maybe only a pitiful 5% full. At beach volleyball, the stands were initially about 80% full, but after the Chinese women's team finished, more than half the people departed (including a contingent of 100+ chanting schoolchildren). An hour later, somebody must have bussed in a couple villages, because then the stands went back up to about 60% occupancy.

As a business, we expected the worse. We knew over a year ago — as did every single hotel chain — that tourist numbers would decline before the Olympics and right after the Olympics. This was already written into the hotel budgets for this year, and any analyst or journalist that expresses surprise at the pre-Olympic downturn should be fired for not doing their job and researching what was planned to happen. This was all expected, as the same tourism downturn happened in Athens and Sydney before their Olympic Games. What was not expected, though, was the pre-Olympic crackdown and refusal around the world at Chinese embassies and consulates to deny visas to foreigners who wanted to travel for business or leisure. This has had a great impact on many businesses operating in China.

And in the past few weeks, as a business, we planned even more. There were rumors circulating in Beijing that maybe businesses would have mandatory closures. Our office sits on Jianguomenwai, the main thoroughfare through the middle of the city. During SARS and during the October 1 parades every 5 years, our offices had strict guidelines not to open the windows or do anything else that might be assumed to be an attack from our building. Our landlord said our building might need to be evacuated for certain days during the Olympics, so we made some contingency plans. We verified which staff had Internet access and their own computers at home; those that did not have access, we prepared the paperwork to have them apply for access. For those staff who did not have adequate computers at home, we planned for them to box their LCD monitors and computers to take them home for the period where the offices would be closed. For our clients, we notified them 2 weeks ago that there might be closures in the Beijing office, so we introduced them to account managers working in our Shanghai and Shenzhen offices (Shanghai and Shenzhen offices are not affected by the oddities in Beijing) who could act as interim support in case staff in Beijing were incommunicado.

There were other things we did on the technical side to prep so far as replication of content between our Beijing servers and overseas servers, but so far, besides one electrical outage on our entire block of buildings on Thursday morning, nothing exceptional has happened. The Olympics are still not yet halfway finished, so these things might still change/happen.

American humorist Dave Barry wrote an article about following directions during his time in Beijing at the Olympics. It summarizes the issues many foreigners and Chinese find when navigating Beijing, namely, addresses mean very little.

To find one's way around Beijing, one should ask five Beijing residents the correct direction to proceed. The first four people will say north, south, west, east, respectively. Therefore, the fifth person will confirm one of the directions, and that is then the way to go. When I was growing up in the USA, we learned in school that the Cold War Soviets and Chinese frowned upon disseminating maps to the public because they could be used by the Americans to plot attacks (I grew up in a military community that was, at one time, supposedly third on the Soviet nuclear hit list). But I think instead maps just were frowned upon in Beijing because nobody knows how to read a map.

It's different in Shanghai. After living in Beijing for 8 years, I moved to Shanghai. Over the last 3 years I've used terminology never needed in Beijing. For example, in Shanghai we always tell drivers either that a location is at the crossroads of two streets or the actual street number. In Beijing, we tell drivers the general area or neighborhood we are going to, and then once there we hunt for the location. Street numbers are more useful in Shanghai because many of the street signs actually have the street number ranges written on them — this makes it easier to tell if you are driving in the correct direction and understand on which block you must stop. But in Beijing, countless times I've had problems with hunting for a location down hutongs or small streets that are unknown to the driver — or apparently even to nearby residents who we ask along the way.

Part of the problem is in how the two cities are currently laid out. Shanghai reminds me of New York, while Beijing is like Las Vegas — Shanghai's homes and businesses are usually located directly on the main roads (and even if they are down alleys, their alley names describe to which road they link), but Beijing has wide avenues off of which can run dozens of small side streets whose names are unimportant to anybody but the people who live on them. If you only know the street name and address, but not the neighborhood or nearby landmarks, good luck finding your location.

In Beijing during this past week I thought of this difference as I was trying to find a buddy from Shanghai who was staying with friends in Beijing. Like a person from Shanghai would, he had given me the name of the street and the name of the new apartment complex in which he was staying. If we were in Shanghai, this would have been enough information. Fortunately I made it close because I was already familiar with the area, but our driver ran down a few dead ends before we found the correct street. The street was new — it had enough room for two lanes of traffic going in both directions, but two years ago that road was a a dirt alley. The driver said it was a new road, so he didn't know it existed. This also points to another issue of navigating in Beijing — the city has morphed so much in the last few years, that there are roads where none existed before, and old roads now are gone or have been expanded beyond immediate recognition.

Beijing is a great candidate for full use of GPS technology. A name of a street and its number are fairly useless in Beijing, but GPS technology can easily find the neighborhood and direction to drive to reach that location. I was standing in the taxi queue at the JW Marriott hotel in Beijing 3 rainy days ago and the woman in front of me was having a problem because her taxi driver and the hotel door openers/security/bellhop also didn't know where a restaurant was located because they only had its name and address. In Shanghai, this information would have probably been enough. But the concierge came out and phoned the 114 directory assistance to get the restaurant's phone number and then phoned the restaurant to find out in which area it lay.

One other point about navigating with taxis in Beijing: whoever was the recipient of the money spent on educating taxi drivers in basic English must be a rich man/woman now. In many Beijing taxis this past week I refrained from speaking Chinese when I first got into the cabs. Besides all being able to say "Hello" and some being able to say "Where are you going?", not a single taxi driver was able to understand me when I spoke the English names of the Olympic venues — not even when I said "Chaoyang Park" instead of "Chaoyang Gongyuan" to get to beach volleyball did a taxi driver understand. These are definitely the Olympics with Chinese Characteristics.

For all the money Adidas must have spent for marketing and sponsorship of the Olympics in Beijing, much of it was wiped away as Li Ning was the final torch bearer in a display that will be replayed for years to come on televisions and commercials. You can't fly in Adidas, but you can sure as heck fly with Li Ning sneakers. The opening ceremonies for the Olympics were pretty impressive, though a bit tedious for the 2 hours in the middle of 204 countries slowly marching in.

I'm an American Airlines frequent flyer member and I just received an email from AA.com that they are no longer working with Kayak.com. Kayak.com is a travel meta-search engine that operates outside of China and it helps users find the lowest fares from a variety of different travel-related websites. The email says:

As a valued customer who has booked an American Airlines ticket through Kayak.com or Sidestep.com over the past year, we would like to inform you that American Airlines fares are no longer being displayed on these sites. You may still find our content through many other meta-search engines for purchase through our award-winning web site, AA.com. Tickets already purchased remain valid for customers traveling on American.

So AA.com will still put their tickets on other meta-search engines, meaning the fallout perhaps was a result of bickering over commissions between AA.com and Kayak.com.

China has a number of different travel meta-search engines, and we have profiled some of them on our B2B travel website at ChinaHospitalityNews.com. In China, airfares are a bit harder to "get the best deal on" because of pricing controls on certain routes, agents are all usually given the same discounts, and if you are a FFP member you can get even better deals than advertised to the public — I have an Air China MasterCard (via CITIC Bank), so a roundtrip flight from China to the US a few weeks ago was about CNY1000 cheaper than buying via either Air China's own website, an agent, Ctrip.com eLong.com, or anywhere else. One of my in-laws in China also runs a travel agency, so I can get better deals with my Air China credit card than using the best wholesale ticket price she receives. Priceless.

I use Kayak.com all the time when I'm traveling in the USA, specifically for flights on American Airlines and Virgin America (which, btw, is the best airline I've ever flown in coach). Now I'll need to find a new meta-search engine for my AA bookings — or just go straight to AA.com, which is supposed to have the lowest fare anyway.

Update: I should spend more time on the blogosphere. Thanks to JR for sending me this link for more info on why AA and Kayak are no more.

Since I hung up my hat on working on ChinaTechNews.com, I decided to get back in and wrote this piece called "Rules For Email Marketing In China's Olympic Year". It re-hashes some of the same things many digital marketers should already know, but hopefully sheds light on some new areas that non-Chinese marketers were not aware of when targeting the Chinese Internet market. The list could have gone on and on…

On our ChinaTechNews.com, a commentary last week outlines Apple's 10+ years of failures in China and what the company must do to attempt to win in China. Among the advice, Apple must focus on its pricing and getting the iPhone legally into China.

This morning I also saw this piece from Mike Elgan who says:

China has an authoritarian government
One-party rule in China actually affects product quality. One example is that Apple will probably be required to disable the iPhone's Wi-Fi feature in order to comply with the Communist Party's strict Internet control and censorship rules.

I understand some of the background thinking on Mike's argument, but he doesn't add any of that background info to bolster his claim — he makes a few mental leaps to get to his conclusion. Also, I was under the impression that the two most important reasons why Wi-Fi was being turned off in many phones was because a) it competes with a dying Chinese standard called WAPI; and b) it directly competes with the CDMA and GPRS services sold by China Unicom and China Mobile, respectively.

The EPCBU, which is a part of our ChinaCSR.com, had a soft launch today. EPCBU stands for "Ethical Profit Case Business Unit", and the "Corporate Social Responsibility"-focused business is run by Sam Lee (we are currently a minority investor and placed it under the ChinaCSR.com umbrella).

The business is different from what we've been associated with in the past: it focuses on research reports and consulting; and Sam has already gathered over 60 different case analysts (as of my dinner with him last Sunday) to work with him on the projects. Sam, by the way, previously worked in fundraising for UNICEF China; started the annual "Beijing Globally Responsible Conference" in Shanghai 3 years ago when he was an MBA student at CEIBS; and wrote a book on MBA programs in China in his native tongue, Korean. In Korea, Sam worked a few years ago in a business very similar to EPCBU, so after gestating the project for 6 months, it's finally started in China.