When China reopens travel, it will be swift. How ready is the hotel industry?

This week has seen institutional investors swing behind tourism-linked China stocks following the easing of several of the measures the government had imposed as part of its zero-covid policy.

And while it is not clear when Chinese tourists will return to the world stage in force, the equity upswings are a timely reminder for hotels to be “China-ready” for when travel restrictions do finally lift.

In this revenue-challenged and cost-constrained environment, many hotels have held off on investments designed to attract Chinese tourists and business travelers until there were stronger indications that lockdowns and harsh return quarantine restrictions would be relaxed.

“The market in China is most certainly where we’re seeing the most challenges,” Marriott Chief Executive Anthony Capuano said during the third quarter post-earnings call.

But mistiming a return of Chinese tourists would be a mistake. Research for the Centre for Outbound China Travel forecasts that pent-up demand in China for travel will drive a return to 2019 levels in the next year.

Chinese tourists are about to return to the global market, but are hotels ready?

Rising incomes and rapidly improving international connectivity transformed China into a global tourism power in less than a decade. From 70 million outbound border crossings in 2011, the industry grew to over 170 million people spending $255 billion overseas in 2019.

The wave of Chinese visitors fundamentally shifted hospitality patterns in Asia — particularly in destinations like Japan and Thailand — but was also felt in the west, including France and the US.

Chinese visitors could be returning to the market shortly. The draconian quarantine requirements for re-entry that discouraged many Chinese from leaving the country are being eased, and further relaxation this week, including Beijing’s decision to allow restaurants and gyms to reopen and downgrade its testing regime are symptomatic of a less restrictive future.

Several countries are already positing themselves for the eventual re-opening.

This week Andrew Phua, Singapore Tourism Board’s executive director for Greater China, told the 2022 Global Partner Summit that Singapore was focussing on safety and wellness to reassure visitors who are still nervous about infections.

In October, Spain’s tourism industry launched a program aimed at educating the nation’s hospitality industry in ways to attract more Chinese tourists when travel resumes.  

But what can individual hotels do? 

Hotels Mag has a few tips to make your hotel China-friendly:

  1. Hiring Chinese speakers: 2020 saw more than 62 million jobs lost in the hospitality space worldwide. With borders reopening, people are needed to re-fill these needed positions but there remains a shortage of workers. This will be magnified when Chinese tourism resumes. Some hotels are getting ahead of the imminent Chinese-speaking talent squeeze by hiring now.
  2. Is your hotel attractive for Chinese tourism? A 2022 Mckinsey study shows that Chinese travelers have disproportionate demand for premium hotels and budget hotels. Mid-tier hotels are finding it more challenging to capture demand. The survey shows that non-branded hotels are generally more popular than branded hotels (56 percent non-branded; 44 percent branded hotels). Does your offering and price point put you in frame to attract the flow?
  3. Ramp up your wellness and experience packages: instead of opulent rooms, research shows Chinese travelers are more likely to spend more on experiences including wellness-themed experiences so put your energy towards sprucing up the spa and offering Chinese-language exercise classes.
  4. Marketing and promotional materials are accessible: A lot has changed in three years, so it’s important that your digital content is refreshed as well. It’s worth spending the time and resources to ensure your content is translated and reflected accurately when displayed in China. If things such as any local taxes and fees payable on arrival are not made clear to the consumer when they book, it will adversely impact their experience