International hotel chain Shangri-La Hotels & Resorts remains committed to luxury despite growing concerns about weak fundamentals in the Chinese hotel market, including overcapacity and the impact of an anti-graft crackdown.
On Monday, Shangri-La launched 'Hotel Jen' – a more affordable brand of hotels aimed at customers with a 'millennial mindset.' It plans to open seven hotels this year, and three in the first quarter of 2015.
But the move does not signal a shift away from luxury, Shangri-La President and CEO Greg Dogan told CNBC's Asia's "Squawk Box" on Monday.
"We're continuing with our expansion in China both in the five-star and the mid-range [segment] and our Shangri-La expansion still continues in the same light," he said.
Luxury sectors in China have been hit hard by the government's anti-corruption and extravagance drive that began in 2012. Last year, 56 Chinese hotels asked to have their five-star ratings downgraded due to worries over how the drive would impact their business, Bloomberg reported.
Dogan acknowledged that the anti-graft drive had an impact on the market, but said demand for luxury remains strong.