IHG launches Hualuxe, new brand in China

IHG, Denham, U.K., announced on Sunday that it has signed 20 letters of intent to manage hotels for its new brand for the Chinese market, Hualuxe.

While IHG did not announce the first opening yet, it said it expects to open the first Hualuxe in late 2013 or early 2014 in one of China’s first, second or third-tier cities or resort destinations.

The new 4-star brand’s target customer is the Chinese business traveler.

“On projected ADR, without a hotel open it is too early to say and it will vary by city but the RevPAR should be between Crowne Plaza and InterContinental. Also, we anticipate over 50% of revenues will come from F&B, so the total revenue and total return is the focus of the brand,” said Richard Solomons, IHG CEO. “Hualuxe is for the busy leaders in business and government that are driving China’s economic resurgence; whose working lives in China’s thriving cities are often stressed. They have intense business schedules, long hours and high expectations to achieve in life. They need a hotel to feel comfortable and familiar but to reflect their status and understand their true needs.”

While not disclosing exact figures, IHG said it is making a multi-million dollar investment in developing Hualuxe. IHG said the new brand was developed in response to three core growth opportunities including consumer demand for an upscale international hotel brand that demonstrates pride in Chinese customs and reflects local traditions, the domestic China opportunity, whereby the number of domestic travellers is expected to reach 3.3 billion in 2015 and the China hotel market is projected to grow by 5% to 8% annually by 2030 and the international opportunity, where outbound trips from China are projected to grow from 10 million to more than 100 million in the next 10 to 15 years, according to the China National Tourism Administration.

In its press release announcing the brand, IHG highlighted four priorities for the brand with tradition, reflected in F&B offerings; rejuvenation, reflected in the natural surroundings in the public areas and resort-inspired bathrooms; status, reflected in the quality of service; and familiar spaces, reflected in the brand’s facilities for social interactions and business meetings.

“Hualuxe Hotels and Resorts is one of IHG’s strategic initiatives to grow market share in Greater China. Long-term goals include introducing this brand to the other markets globally,” Solomons said.

Currently IHG is focused on launching the brand in China, seeing the opportunity for Hualuxe to be in over 100 cities in China in the next 15 to 20 years, but said it could be expanded elsewhere in the world.

Here’s a video from IHG about the new brand: