The Chinese traveller has become one of the most sought-after patrons in the hotel business.
Hotel giants such as Marriott International, Hilton Worldwide, and InterContinental Hotels Group (IHG) are pivoting to the Asia-Pacific, and increasingly see China — their second largest market — as becoming their No 1 focus.
“We are very bullish about the market and very optimistic about the long-term prospects when it comes to travel trends within China,” Martin Rinck, president of Asia-Pacific for Hilton Worldwide, told the Post last Thursday.
“China is a big market for us,” said Craig Smith, president and managing director Asia-Pacific for Marriott International. “I’m fairly sure that in a few years, it’ll be No 1.”
China’s domestic tourism market has ballooned in recent years, surging more than 12 per cent in the first half to US$350 billion, government statistics showed.
Domestic tourism spending is expected to grow 16 per cent annually, reaching US$615 billion by 2020, according to The China Business Review.
In order to cash in, international hotel chains have launched brands tailored to Chinese guests, such as French AccorHotels’ “Mei Jue” brand, Swiss company Mövenpick’s “Rui Xiang”, and IHG’s “Hualuxe”.
IHG has opened three hotels under its luxury Hualuxe brand, which it says captures “the spirit of Chinese hospitality,” and has 21 more in the pipeline.
“It’s been a big driver for the greater China growth,” Kenneth Macpherson, IHG’s president for Asia-Pacific, told the Post in October.
Meanwhile, Marriott introduced its mid-priced Fairfield brand to the mainland market in February by partnering with Guangzhou-based Eastern Crown Hotels Group, a company they felt would understand the Chinese experience. Marriott plans to have 140 Fairfield hotels in five years.
“The Chinese travellers want the international brand, but they also want a localised experience,” Peggy Fang Roe, chief sales and marketing officer for Marriott Asia-Pacific, said.
In addition to expansion within China, these companies aim to capture outbound Chinese travellers — 64 million in the first half of 2016 — with hotel experiences catered to Chinese consumers.
Hilton launched its Huanying or “welcome” programme in 2011 to facilitate travel for Chinese guests around the world, currently operating in around 130 hotels outside of China.
The programme offers Chinese consumers “a touch of home away from home,” according to Rinck.
Its services include Chinese-language newspapers, television channels, translation services, hotel slippers, tea and coffee-making facilities, as well as a breakfast buffet with dim sum, congee, and noodle soup, he said.
Marriott’s equivalent is its Li Yu programme, rolled out in September, to provide Chinese-language and other localised services for Chinese travellers around the world.
The hotels will also offer tea, Chinese-language newspapers, and slippers for travellers from China, as well as Mandarin-speaking hotel staff and the ability to connect with hotels via China’s popular messaging and social messaging platform, WeChat.
“The world, not just us, the world is starting to become more considerate of the Chinese traveller and their needs and desires,” Smith said.
But as these companies turn to China, hotel executives admit they are grappling with a consolidating industry — highlighted by Marriott’s recent acquisition of Starwood Hotels and Resorts — and one disrupted by online travel agents, Airbnb, economic slowdowns, and geopolitical uncertainties.
They say the solution to these concerns involves building greater brand awareness and loyalty programmes.
Hilton’s Rinck said he does not worry about factors he cannot control, such as the effect of the depreciating yuan or the surprise election of Donald Trump.
Instead, he focuses on the underlying fundamentals of the China market and what he sees as the biggest change in the industry: technology.
For instance, increased digitisation now allows Hilton’s loyalty programme members to select rooms online, see room views via Google Earth, check in at hotels on mobile devices, and use phones as digital room keys, according to Rinck.
Hilton will roll out digital keys in China next year, he said.
Meanwhile, IHG is using their hotel’s mobile app to drive loyalty and revenue through their own channels, in a way that is “as efficient and effective for Chinese guests as possible,” according to Macpherson.
He remains optimistic, saying China’s hotel industry will continue to grow on rapid urbanisation, a growing middle class, and government policies supportive of domestic consumption and tourism, he said.
“We have great confidence that there’s a growing middle class, one of the largest middle classes in the world,” Marriott’s Smith added. “So China for us, it’s a great story.”
Despite headwinds, the underlying nature of the hotel industry will not change, according to Clement Kwok King-man, chief executive officer of Hongkong and Shanghai Hotels.
“People are always attracted to hospitality; this is human character,” Kwok told the Post in late November. “We’re selling a service which makes people feel good, that’s the very fundamental of what we sell.”
Read the original article on the South China Morning Post.
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