Intercontinental Checks into China

Peking may never rival Paris as a fixture on the international travel circuit, but the gradual parting of the Bamboo Curtain in the 1970s has enabled more and more foreigners to see the wonders of the Middle Kingdom. This year, 100,000 foreign tourists and businessmen-including 15,000 Americans--will visit China, and next year the total could double. What most visitors bring back, besides snapshots of the Great Wall and the Ming Tombs, are horror stories about the accommodations. Hotel rooms are hard to get, ah" conditioning is rare, and such Western amenities as bars, saunas and swimming pools are all but unknown.

All this could now change. Last week Pan American's Intercontinental Hotels subsidiary signed a preliminary pact with the Chinese to build six or seven hotels, each with 500 to 1,000 rooms. At least one hotel will be in Peking; others may rise in Shanghai, Canton, and perhaps in the lakeside resort town of Hangchow and the country's ancient capital of Sian.

Intercontinental makes a practice of putting up units that reflect their surroundings. In China, the Intercontinentals will all have different designs that match their neighborhoods. The Chinese themselves, says Intercontinental Chairman Paul Sheeline, want modern hotels, "but they don't want them to have what they consider to be unnecessary facilities." Most of these, however, are what Westerners would consider minimum requirements for civilized travel. So the company compromised: it gave up on nightclubs, but insisted on providing bars, small swimming pools, modest health clubs and perhaps a couple of tennis courts.

China will own the hotels but Intercontinental will share the profits and run the inns for ten years or so while local managers are trained. Intercontinental will also help arrange financing for the chain, which will cost perhaps $500 million or more.

Peking hopes that tourism will provide foreign exchange needed to help pay for its ambitious economic development plans. Indeed, Intercontinental's hopes of pioneering in China (other firms will also surely be invited in) got a crucial lift last October, when Pan Am Chairman William T. Sea well had a meeting in Peking with China's Deputy Premier Teng Hsiao-p'ing, who is the regime's leading proponent of rapid development.

The Intercontinental deal should further Pan Am's hope of resuming service to China, which it suspended in the early '40s. For the past year, the airline has been running a heavily booked six-day China tour (total cost: about $1,145 double occupancy), but it has had to fly its customers to Tokyo or Hong Kong for transfer to Chinese planes or ground transportation. That may not always be necessary. Earlier this year, Pan Am gave up its routes to both Moscow and Taiwan. Though the company denies it, those moves look as if they might have been aimed at helping Pan Am fly directly to some of the mainland cities that are soon to sprout Intercontinental hotels.

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