Culturally relevant hotel development strategies for Chinese consumers
Just as Western travelers who visit China are sometimes surprised by the unique service articulation in local Chinese hotels, which may include breakfast offerings that don’t necessarily satisfy a European or American palate, Chinese travelers experience the same clashes in reverse. Details can make a big difference.
While nearly all the big international hotel chains have properties in mainland China to cater to Western travelers, as well as to a growing number of Western-oriented Chinese guests, a few international hotel companies are looking to push the relevance factor to a new level.
Last year, Hilton announced its Huanying (Chinese welcome) program, where Hilton properties outside of China are certified to essentially be “Chinese-friendly” by offering amenities deemed important for Chinese travelers, including a front-desk person fluent in Mandarin, guestroom amenities such Chinese tea and breakfast items including congee and dim sum.
With aggressive growth plans in China, Starwood Hotels and Resorts Worldwide transferred its corporate head office to Shanghai from New York for a few weeks last year, while IHG just launched the first China-focused hotel brand built for Chinese travelers, Hualuxe Hotels and Resorts. With extensive brand development and investment, the plan is to launch in 100 cities across China in the next 15 to 20 years and extend Hualuxe overseas.
Kempinski Hotels & Resorts, with its Kempinski Beijing Lufhansa Center having been one of the first international luxury hotels in China, seems to be taking a multi-pronged strategy when it comes to China. While the company has grown the number of Kempinski hotels in China in second- and third-tier cities, it is also in the process of launching new brands in China. While its hip budget brand Tangram Hotels may also expand outside of China, the company announced the launch of its new luxury brand Nuo, which will be developed only in China, and is described as 5-star, featuring contemporary Chinese art.
Accor seems to have similar ideas, but is taking a short cut by announcing plans to re-position the existing Grand Mercure brand for upscale Chinese consumers, and plans to open 65 Grand Mercure hotels in China by 2015.
On the other scale of the spectrum, Chinese hotel chain Jin Jiang Hotels, according to its new German-born CEO Bernold Schroeder, is in the best position to cater to Chinese consumers — not just on the mainland, but also outside of China. Ranked as the largest hotel company in China and 12th largest hotel company globally, Jin Jiang is marketed as the authentic hotel chain from China. In China, many of its grand heritage properties are managed by foreign brands, but Jin Jiang is looking to strengthen its own brand going forward. While Jin Jiang has its own plans to expand internationally, the Chinese company has partnered with Louvre Hotels Group to unveil the Campanile and Jin Jiang Inn co-branded initiative. The partnership, as a way to cash in on the growing number of Chinese tourists visiting France, applies to 15 Campanile hotels in Paris, Bordeaux, Lyon, Marseille and Nice, and will result in both brand names being displayed at the entrance, Chinese-language brochures, Chinese speaking staff, Chinese food items on the buffet and Chinese TV channels in each guestroom.
There is also a new phenomenon of new hotel brands being born in China. Does this mean companies are using China as a testing ground for new products and services? Shangri-La Hotels & Resorts just launched the Kerry brand in Shanghai and Beijing. Kerry Hotels feature a unique experience incorporating high-energy restaurants and oversized gyms for younger, affluent Chinese.
In 2008 during the Beijing Olympics, Hong-Kong based Swire Hotels launched its first property, the Opposite House, in Beijing’s high-end and modern shopping area Sanlitun, also developed by Swire. A couple years after the Opposite House opening, the company opened the Upper House in Hong Kong, and is opening the second East Hotel, in Beijing, later this year.
Which strategy will yield the best results in leveraging the China tourism boom? Will Chinese consumers truly identify with brands like Hualuxe and seek it out over the countless other Chinese-owned hotel brands? Will developing China-focused brands make Chinese consumers feel alienated and discriminated in an indirect kind of way, or will they be able to become brands of choice for Chinese consumers because they deliver culturally relevant services? Maybe some companies will soon come up with China-only floors. On the flip side, some international travelers are already looking to avoid hotels and destinations that are frequented by (too) many Chinese or even Russian tourists. Will the Chinese-focused (or maybe Russian-focused, Indian-focused, etc.) hotels keep Western guests separated from the new tourist invasion from emerging markets?
For Chinese companies like Jin Jiang to expand overseas seems like a no-brainer if they can execute international development and figure out how to market to international travelers. Therefore, the model of the Louvre Hotels partnership might be a good strategy.
Keeping in mind that Chinese outbound travelers will grow to over 100 million by 2020 according to the World Tourism Organization, for international companies to develop new brands in China before expanding them internationally might be an interesting strategy, if they are able to execute in China.
Finally, it is refreshing to see some hotel companies taking innovative approaches when it comes to China. However, whatever the strategy of hotel companies, it is critical for a brand to build awareness in China. The most effective way to reach and connect with Chinese consumers and to build or introduce a consumer brand in China is to leverage the web and social media. The Internet landscape in China is the most complex and most competitive in the world. It requires a completely different strategy due to the fact that sites like Facebook, Twitter, YouTube, and Google+ are blocked, and local sites dominate the domestic landscape. The rules of engagement online are different, and looking at transliteration instead of straight translation when developing content for Mandarin-language websites is important.
Having a culturally relevant brand is great, but not being able to communicate it in a culturally relevant way might be the demise of a successful strategy.