Calling the lobby concierges by their English names etched on silver platters might be a fading trend in China.
Instead, aspiring high-end hoteliers increasingly pride their brands on mastering the art of localized story-telling: dishing out dim sum for breakfast, introducing noodle bars and tea houses, and beefing up their Chinese-speaking staff. Bringing back the renaissance ofan oriental identity is in vogue. To stand out from the swath of well-established Western hospitality groups that dot their “China-centric” brands across the country, boutique hotels in China are carving out their own niche. China’s state-owned firms and domestic hospitality upstarts are also betting big on the high-end hotel market.
Propelling this industrial buzz is the country’s bulging wealthy class seeking luxury for a sense of connoisseurship and self-reward. As KPMG’s 2011 report on luxury experiences in China reveals, consumption appetite for overseas travel and expenditures on health and beauty treatments are rising, and they are expected to continue to rise in the years ahead.
“Brands rooted in Chinese elements are gaining international recognition but are also sought after by Chinese customers,” says Sandy Chen, research director with TNS in the report. “There is a rising sense of national pride and cultural renaissance.”
Combining luxury with art
Prestigious members of the luxury hospitality brands such as Peninsula count locale as one of their biggest assets, said the Peninsula Shanghai General Manager Joseph Chong. “Our culture here is being nostalgic. We are simplistic, elegant, and ensure that we infuse the heritage of the locality where we are.”While their Shanghai property exudes a flavor of art-deco, their Tokyo hotel expresses a minimalist touch with their Beijing property accentuating an oriental impression. “That’s how we build our brand in respect to the local culture,”said Chong.
A slew of recently launched boutique brands in China have ushered in the concept of theme-based hotels, many of which are converted from old buildings rich in historical heritage. As China’s first deluxe City Heritage Boutique Hotel, Mansion Hotel recreates the decadence of old Shanghai. A French architect transformed the 80-year old property from the former club house of Shanghai gangster Du Yue-Sheng into a 30-room hotel and museum.
In Beijing, the Schoolhouse at Mutianyu Great Wall falls on the opposite end of the spectrum of luxury lodging.
Expats and companies hungry for a rural residential experience, prompted Californian Jim Spear to refurbish deserted school buildings in the countryside of Beijing. The Schoolhouse complex includes three restaurants, a glass-blowing workshop, conference rooms and 16-room residential spaces. Activities and decorations bear the distinct hallmark of Chinese culture. Besides transforming existing old properties into eye-catching architecture, many hotels demonstrate a highlevel of commitment to supporting local artists. Beijing-based luxury hotel the OppositeHouse, owned by Swire Hotels Group, is a meticulously designed property that mixes simplistic Western elements with contemporary Chinese artistic tastes. “The hotel has a contemporary interpretation of traditional Chinese design features,” said Anthony Ross, General Manager of the Opposite House
located in Beijing’s hip Sanlitun Village. Every three months the hotel hosts a rotating show featuring Chinese contemporary artists, and all of the artwork displayed in the hotel is created by ethnic Chinese artists. The property’s clientele includes entrepreneurs, architects, and people from the fashion and creative industries. Securing a strong international market from the US and UK, the Opposite House has also witnessed its Chinese customers jump from 4% when it first opened to 16% after four years. “More and more younger [generations of] Chinese are studying overseas and working in an international environment,” said Ross,
“and we think there is a market for it.” Luxury hospitality branding extends far beyond tangible assets. Increasingly it demands a holistic aura that gives off a luxurious perception. According to Jing Daily, “a growing number of Chinese business travelers opt for experiential high-end hotel stays, centered around eco-friendly getaways, intensive spa treatments and even art tours.” Nearly 50% of Peninsula Shanghai’s clients are ethnic Chinese, all of whom are aspiring luxury consumers, according to Chong. To spread the ethos of luxury, the hotel launched the Peninsula Lifestyle Academy where they teach people about dressing and styling. “For us, we want them to appreciate it,” said Chong, “defining luxury is a past thing. We are a company that creates the benchmark of luxury.”
While upscale boutique hotels have gained a foothold in this niche market, international hoteliers are following suit, wooing middle class Chinese with brands and programs designed to make them comfortable while on the road.
France’s Accor unveiled its fully tailored Grand Mercure brand in February 2012, targeting the upper market in China’s domestic tourism sector. Regarded as “one of Accor’s future growth engines” in the Asia Pacific region, the China-centric branding approach is a key step for Accor to modernize its brand portfolio. “Our clients are now expecting brands capable of understanding the diversity and the complexity of their identity,” said Grégoire Champetier, Chief Marketing Office at the launch event. Also betting on the bullish growth of China’s avid travelers, InterContinental
Hotel Group made a splash with its tailor-made “HUALUXE” brand for China, which is set to spread across the country’s multi-tier cities and resort destinations. The 4-star hotels are intended to cater to leaders in business and government who are stress-laden and need a hotel to feel comfortable, but which also reflect their social status. US-based Marriott International also unveiled a suite of customized amenities and services targeting the Chinese outbound traveler. Meaning “serve with courtesy” in Mandarin, Marriott’s “Li Yu” program not only offers Chinese-style menus, Chinese TV channels and Chinese-speaking staff members, but also assigns rooms with numbers “6” and “8”, which are considered auspicious in Chinese culture. The program will roll out in Marriott’s various hotel brands in Asia next year, as well as in select international hotels in key gateway cities. As more than a million Chinese traveled to the US in 2011, many US hotels based in cities with great tourism attractions are vying for a bigger share of the pie. Marriott digs deep into the rich Chinese culinary system, and even offers different styles of food depending on which specific region the Chinese travelers come from. According to an AP report, guests from eastern China are treated with salted duck eggs and pickles, whereas southern Chinese can expect to see home-style delicacies such as dim sum on the menu.
“I think Chinese consumers have passed the stage of wanting large and luxury hotels, the market has become more mature in terms of picking travel accommodation,” said Gilbert Menetret, General Manager at Grand Mercure Shanghai Hongqiao, “They want hotels that can offer them more personalized services that make them feel like they are not in a cold concrete hotel room, but in a home away from home.”
“The core idea for hotel brands to go local is to capture the hospitality essence intrinsic to the Chinese culture“
Tim Gao, Vice Chairman of China Hotel Association
Defending the home turf
Chinese hotel groups, despite their gargantuan size, always lag behind in terms of creating an internationally recognized brand. Yet, industry experts note that China’s domestic brands possess advantages that could enable them to catch up to or even outperform their Western counterparts in the long run.
According to the KPMG luxury report, over one-third of Chinese consumers believe that domestic hotel and resort brands have the potential to establish a luxurious image and take off only after other luxury products like alcohol, fine art and jewellery.
But Tim Gao, Vice Chairman of China Hotel Association, said that domestic hotel brands are in a favorable position to win.
As the number of inbound travelers to China dropped dramatically after 2008, domestic travelers will be the largest client base for hotels, which, to some extent, erodes the existing advantages of Western brands.
Citing figures published by Horwath HTL, Gao said that since 2009, Chinese hotels have caught up with international hotels on GOP (Gross Operating Profits per Available Room).
Both old industry mavens and new entrants in China are taking bold strides into the high-end luxury hotel market. China’s first upscale hotel and resort brand, Ahn Luh sparked a frenzy among investors when it first launched in March. General Hotel Management joined hands with Beijing Tourism Group, along with Great Ocean Group to invest in the brand’s first property in Sichuan’s Dujiangyan, near the UNESCO World Heritage site. Jin Jiang Hotel, the largest hotel group in China with over 100 three- to five-star hotels, is poised to compete head-to-head with global hotel brands to retain upscale Chinese travel customers. The company will launch the 121-story Shanghai Tower J in 2014, which, according to co-developer Thayer, will make it China’s first luxury brand looking to spread across China’s top 10 cities.
“The core idea for hotel brands to go local is to capture the hospitality essence intrinsic to the Chinese culture,” said Gao from China Hotel Association, “In this regard, I believe that Chinese brands are more mature and will perform better. ”