Located at the confluence of Beijing’s centers of commerce and government, in Xicheng district, it is perhaps unsurprising that a hotel like the Presidential Beijing should seek out more and more corporate business. Beginning last year, the 485-room hotel has sought to shift its focus from leisure to business in the hope of capitalizing on growing demand. Sonja Wilms, the Presidential Beijing’s director of sales international and MICE (meetings, incentive, conference and events) talked with CHINA ECONOMIC REVIEW about what this transformation entailed and spoke about her outlook for business travel next year.
Q: What recent trends have you seen among guests?
A: Our hotel has been focusing more on the corporate segment over the past year. We wanted to convert the hotel from a predominantly leisure hotel into an international business hotel. In recent years we have seen a good increase in the corporate room-nights. [This year], we have noticed that companies around the world are focusing on reducing travel costs. At the moment, there’s a lot of shopping for value. It’s very important for companies to get a good rate [on hotel rooms]. Business trips are getting shorter and travel budgets have been cut. For airlines, for example, there are fewer people traveling in first and business class. Nevertheless, we’re a Chinese hotel with links to an international hotel group, so we can give good value for price.
Q: How do demands from business travelers differ from leisure travelers?
A: Early check-in, late checkout, and having Wi-Fi or a high-speed internet connection included in the rate [are important]. For the meeting facilities, having internet access and an LCD Projector in the meeting room are also very important. The location of the meeting facility needs to be good. For example, if there is a large meeting in the ballroom, and guests also need smaller break-up rooms, it’s important that they be located on the same floor. Of course, they also need good service provided from hotel staff.
Q: What challenges do you face from a service point of view?
A: The key challenge in China for human resources is to find well-educated sales staff with good English skills and training in the hotel industry. Also, there is a lack of understanding of international distribution and market flows, and global vision and practice. We focus a lot on training sales people. The expatriate management team provides information and training to local staff to give them a better understanding of how things work internationally. Also, they need to have support from the human resource people to ensure they are receiving the right training in service culture.
Q: Who makes up the bulk of your corporate clientele?
A: Most of our hotel guests are Chinese guests, but the hotel has a very healthy mix of national and international guests. We have guests from government, and we have corporate guests from the finance sector because we are located in the finance and ministry district. But we have a lot guests from large Chinese companies in the health industry, pharmaceuticals, banking and IT companies. We get most of our business from companies that are close to our hotel, but we get domestic business from Shanghai and other cities as well.
Q: Among the four different MICE categories, where have you seen the most interest?
A: Our hotel has a good ballroom with adequate exhibition space in front of it, so we have a very high demand for use of our ballroom as a combination of conference and exhibition space. Since we are in China, a lot of our private meeting rooms are used for private dinners and VIP rooms. We also have companies hold board meetings in these rooms. It’s a healthy mixture of everything. For weddings, we have a garden roof, which is like an in-house garden with a glass roof. It is used more for celebrations, family events and weddings. At the moment, about 15% of our business comes from MICE.
Q: What are some of the key challenges for mainland cities as they compete for larger MICE events with other Asian locations like Singapore, Macau and Hong Kong?
A: The Beijing Tourism Bureau needs to be more active to attract bigger meetings and conferences in the city. We have different convention and exhibition centers in Beijing, but I think there’s a lot more opportunities. I don’t yet see that the Beijing tourism authorities are very active in marketing.
Q: What is your outlook for 2009?
A: It really depends how fast we can overcome the economic crisis. At the moment, I expect the market to be more observant. Booking decisions will be made more short-term. I assume for Beijing that things are still growing and there is a lot of attention focused on it as a post-Olympic city. I think we will do better than in 2008.
Q: How did 2008 match up to your expectations?
A: It became something different to what it was in the beginning. Everyone expected a lot and the year started very strongly. Then a lot of things happened that were out of our control like the snowstorms, the earthquake, and the [tightened] visa regulations and other regulations before the Olympics. And post-Olympics, we have the financial crisis. These things were not forecast at all.
Q: Are things returning back to early 2008 levels now?
A: Yes. I am very positive there will be another growth period coming up. With the marketing and attention Beijing has received, the future will be a positive one.
Q: Do think Beijing’s luxury hotel market is oversupplied at the moment?
A: In my opinion, bearing in mind Beijing is the capital of China and a major global business and leisure destination, the city was suffering from an undersupply of luxury hotel rooms prior to the Olympics. Of course, in the run-up to the Olympics, every hotel group focused on opening hotels. Now that we being challenged by the economic crisis, it feels like there is an oversupply. But like I say – and I think many other people I’ve talked to in the hospitality industry here feel the same way – China has a strong future. Once we have overcome the economic crisis, this supposed oversupply will be absorbed very quickly.