U.S. Hoteliers Wooing Chinese Business

Reprint of an article by Helena Iveson HNN correspondent on May 27 2015, Hotel News Now

GLOBAL REPORT—Kenneth Macpherson, CEO of InterContinental Hotels Group in Greater China, puts it well: “Booming China outbound travel is changing the global tourism landscape.” As such, hotel companies are taking notice and catering to this band of travelers.

In 2014 Chinese travelers made 107 million outbound trips, according to the China National Tourism Administration. The United Nations World Tourism Organization reported that these travelers spent a record $165 billion the same year, making them the world’s biggest spenders and the world’s largest outbound tourism market.

“It’s very exciting to see this unprecedented growth in Chinese travel, especially to the U.S.,” said Jon Scofield, senior director of full service and luxury brand operations for Hilton Worldwide Holdings.

Hilton, along with IHG and Hyatt Hotels Corporation, are responding with offerings that appeal to this particular segment. Most recently IHG announced its “Zhou Dao” program, while Hyatt has “Nin Hao” and Hilton has “Huanying.”

“As more Chinese travelers come to the U.S., many for the first time, the Huanying program continues to be more and more relevant, especially with offerings like 24-hour interpretation service, comforting favorites like traditional Chinese breakfasts and in-room tea service,” Scofield said.

“It is important to Hilton to ensure we’re evolving as our guests evolve and grow both from a numbers perspective—expanding Huanying to more properties around the world—and from an experience standpoint, so keeping our pulse on what matters to Chinese travelers and continuing to evolve our offerings to meet their needs,” he said.

IHG launched its program in April and offers Chinese travelers a home-away-from-home experience, according to Macpherson.

“IHG is capitalizing on its over three decades of operating experience in China,” he said, adding that almost 100 hotels across the globe participate in the program with the number to reach 250 by year’s end.

Training staff is also a vital part of the plan, and IHG has invested heavily in equipping its worldwide hotel staff with Chinese etiquette, culture and hospitality training. Macpherson said that by the end of 2014, more than 10,000 global employees acquired “Zhou Dao” service training.

These programs are paying off, sources said.

Hilton’s Scofield said that research has shown Chinese guests who stay at participating Huanying properties expressed a substantial increase in customer satisfaction in areas including service, accommodations, property loyalty and overall experience.

“Among all participating Hilton Huanying properties, Hilton has seen a 15.3% year-over-year growth in Chinese visitors in the past year,” Scofield said.

Katherine Cole, regional director of Hotels.com in Asia/Pacific, agreed these programs are needed and are proving popular.

For instance, she said according to “Chinese international travel monitor 2014,” more than 70% hotels already offer free Wi-Fi, the No. 1 service requested by Chinese travelers. Meanwhile, 50% of Chinese travelers thought in-house Mandarin-speaking staff was important, with 48% wanting translated travel/tourism guides.

Awareness a work in progress
Gary Bowerman, author of “The New Chinese Traveler: Business Opportunities from the Chinese Travel Revolution,” believes the awareness of the Chinese market is a work in progress.

“Levels of preparedness have changed a lot, but still need improvement,” Bowerman said. “Even 18 months ago, I was in London talking to hotel managers and even though it was September, several weren’t aware that it was soon to be a national weeklong holiday in China so that many Chinese tourists would be heading their way.”

Jan Freitag, senior VP of strategic development at STR, the parent company of Hotel News Now, does strike a note of caution for hoteliers who are expecting Chinese travelers to be their saviours.

“Of course, you can’t underestimate more than a billion people coming into purchasing power. But some countries and key destinations will benefit more than others; it’s not going to be across the board. There’s not going to be huge influxes of Chinese people to smaller destinations,” he said.

While some prognosticators say this is one of the huge reasons for the prolonged recovery cycle in markets in the U.S, Freitag is not convinced.

“Chinese travelers have an important effect, but it’s not yet vital. The year-on-year growth rate is 21% and very impressive, but in terms of the absolute number of travelers, Chinese visitors are the fifth biggest market to the U.S. with just under 2.2 million in 2014.”

In November 2014, the U.S. agreed to increase the number of short-term tourist visas available to Chinese people, so it’s likely that numbers of visitors will keep on climbing. Hilton’s Scofield said, “Given the rising Chinese middle class and explosion in outbound leisure travel, we expect to see arrivals in U.S. cities to rise. For the U.S. in addition to favorites like New York, San Francisco and Los Angeles, we anticipate a rise in locations with new direct flights like Dallas.”

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