Understanding Chinese outbound travel

It’s a no-brainer to wonder about how China’s hospitality industry is evolving during this current era of rapid cultural change and modernization. My first trip to the Asian continent, sadly, came late in life — less than two years ago — and I sincerely wish I could have visited earlier (and again!). Every hotel I stayed at excelled at service with dozens of takeaway lessons for Western hospitality businesses.

In my quest to understand the situation, I came into contact with Ernie Diaz and Joseph Cooke, two members of the executive management team of Web Presence in China. Since then, I’ve had several delightful and insightful conversations with them, getting a firsthand perspective on how Chinese travelers think. What they purport is that the modern Chinese tourist is just as savvy as those elsewhere and that they rely heavily on Internet-based third-party review websites. This interview with Ernie elaborates on how Western properties can capitalize on this mindset.

Larry Mogelonsky: Anyone who has experienced Asian hospitality knows that it is superior to that of the Western world in many significant ways. What differences have you noticed, and what accounts for them?

Ernie Diaz
Ernie Diaz

Ernie Diaz: If you’re doing the 5-star circuit in China, you’ll find prices for personal services — such as at the spa — more reasonable thanks to low labor costs. But the average 3- or 4-star hotel in China resembles a motel in the West — one not particularly interested in keeping its doors open much longer. To be sure, vast marble foyers predominate, but the theme is form over substance. Once you’ve gone into your room in that average Chinese hotel, the feel is unhygienic, bathroom plumbing is a fright and complaints are addressed with much less than what would pass muster in a Western hospitality organization with dedicated management.

LM: Am I right to suggest that this disparity all boils down to labor costs?

ED: China’s famously low labor costs are actually a factor in China’s continued lag behind international-level competence. The many employee cogs who make a good hotel run smoothly are all aware of how replaceable they are. The attraction of marginally skilled labor (“We’ll just train them up!”) overwhelms the good sense of hiring people with educations and good language skills for foreign customers then paying them for what they are worth. As a result, revolving-door staffing is the norm, and talented, dedicated professional Chinese staffers below the managerial level are rare.

LM: If Eastern labor costs cannot be beaten, what other key marketing strengths does the West have from a Chinese perspective?

ED: Quality always beats quantity. Thinking bluntly, Germany will always have a stronger economy — thanks to its educated workforce — than China will with its hundreds of millions of factory fodder. China itself is first to acknowledge this, as it is doing everything in its power to transform itself from an export economy to a skilled-labor, consumer-led one.

So, just as Chinese tech companies do all in their power to model their techniques to match Western best practices, so do Chinese hospitality businesses seek to replicate the organizational excellence of Western hotel brand leaders. Western hoteliers cannot underestimate the advantage of systematized service, so that an experience with a brand is the same from Hawaii to Hohhot. Any savvy Chinese domestic traveler knows that a stay at the Xi’an Hilton will surpass nearly everything available from a local Chinese competitor, and those with the travel budget behave accordingly.

LM: Which of these Western strengths are top of mind for Chinese travelers?

ED: Service standards, every time. Chinese travelers know a big brand Western guestroom will never have strange stains on the rug or bedding; that water pressure and temperature will not be issues; that there is a whole system for demonstrable actions behind brand promises absent from the boasts of Chinese hotels. In broad terms, the Chinese still idealize the West in terms of brand excellence, product value and service standards.

LM: How would you go about conveying and marketing these broad points of differentiation to Chinese travelers?

ED: Superior service is something that must be experienced. The Chinese traveler is just as leery as her Western counterpart towards commercially centered messaging. But to be concrete, here’s a tip: list on the Chinese version of TripAdvisor, DaoDao. Make sure the pictures are clear and the descriptions accurate. Consumer rating can almost be considered a national pastime in China. If a Chinese traveler has a good experience with you, that’s the most likely (and easiest) place you’ll be found and then commented on by objective third parties — the only kind of messaging the Internet generation really trusts.

LM: Thinking broadly, what trends are on the forefront or will be crucial in the near future in terms of appealing to Chinese travelers?

ED: The challenge lies in placating this new pedigree of Chinese outbound/global travelers who know and expect the superior level of service that is completely alien to the Chinese tour-group-traveling predecessor of just a decade ago. That means a degree of Mandarin localization is inevitable for those who want to grab future Chinese traveler market share from competitors — not thousand-year-old-eggs or silk slippers in the credenza, but rather localized information so a Chinese traveler can enjoy your offerings as thoroughly and easily as someone who speaks English as a first language. It’s all about cultivating an authentic local experience for your guests; you just have to go a bit out of your way to ensure that Chinese travelers don’t feel intimidated or left out.