Here to stay

Holiday Inn's hotels are known the world over. The group is not only the biggest hotel chain in the world, but is also the biggest in China with a total of 14 hotels across the country. Its familiarity is inevitably an advantage.

"People know what to expect with Holiday Inn," says Bernd Riegger, vice president of operations for China. "That is an assurance for a traveller arriving in a place like Urumqi."

The group's expansive worldwide chain also ensures easy booking and planning for business travellers. "We are the only international hotel group in China to have distribution," explains Riegger. "That is our biggest advantage. Most business travellers that come to China don't only go to one city. You can book in London, for example, for your stops in China. It is a one-stop type of shopping;"

With such a high number of properties in cities ranging from Lhasa to Guangzhou and Guilin to Xiamen, the group is not aiming to scoop only the business traveller.
"Ideally, we would like to have a very healthy mix because when you depend purely on business travellers, you tend to have a slack in summer during the holiday period. An ideal proportion is 60 per cent business to 40 per cent tourist, but this you can not get in cities like Guilin and Xian because they depend almost exclusively on tourism. they

Roughly 90 per cent of the Xian hotels' business comes from tourists, and their heavily unbalanced dependence has led to problems. After the events of June 1989, the number of US and European tourists slumped dramatically, and others of Holiday Inn's China hotels pulled through a tricky two years with a heavy reliance on Asian tourists.

"But Xian is a city where most of the Chinese emperors are buried," explains Riegger. "That is the attraction ? it is basically a huge graveyard. And overseas Chinese do not like to visit cities that are graveyards. Business is now picking up again, but it is still much slower than the other cities and today we are still struggling."

At the other end of the spectrum, the success of Holiday Inn's most profitable hotel, in Dalian, can also perversely be attributed to the Tiananmen Square incident. The city, situated in what was previously Manchuria and is now Liaoning, was occupied by the Japanese in the Second World War. The Japanese became very well acquainted with the province and inevitably a great deal of investment followed in subsequent years. "Since the unrest in 1989, the Japanese were the ones who stayed in China. So this hotel rode the storm better than all the others."

This hotel, along with the majority of others in the chain, has a 4-star rating. The exceptions are the 5-star Crowne Plaza hotels in Beijing and Xiamen, and one in Shanghai that is currently being converted.

Riegger feels that in pitching below the luxury market, the group has found itself an excellent niche.

"Because generally the business traveller that goes into China is not the chief executive type of person," he says. "The chief executive might go once every two years. The people who actually make the deals are going to go in very regularly, and these are the people who look for first class, not luxury accommodation. And, we are more than twice the size of our nearest competitor, which means we have a very strong market position."

Not only is the number of business travellers growing rapidly, but so is tourism. "The rise is fantastic actually," Riegger enthuses. And there are not many parts of the world that you can say that about at the moment.

However, the healthy rises are one thing, but China's still inadequate infrastructure continues to restrain the growth. "This is our single biggest problem," says Riegger. "Following the boom in hotel construction in the mid-80s, even if all the flights coming into China's main centres are full, the hotels are not. The Chinese have to improve the airport and airline infrastructure. I have to admit that a lot is being done, but from a hotelier's point of view, there is never enough being done!"

The lack of airline infrastructure will not greatly affect Holiday Inn's fastest growing market ? the local Chinese. "In one of our Beijing hotels ? the Holiday Inn Downtown ? 60 per cent of our room guests are local Chinese. That is obvious-the highest. On average it is about 15.2 per cent. It is a very, very fast growing market and we are putting a lot of emphasis on it at the moment.?

This emphasis includes accepting RMB, only a relatively recent policy for joint venture hotels. Many still demand a surcharge for RMB, and Holiday Inn is no exception, but Riegger claims that the group "is trying to encourage" its hotels to drop the surcharges and to accept RMB at face value. Some already have.

A year ago, the group started its big campaign to encourage local Chinese to come to its hotels to spend their RMB. With the aim of breaking down preconceptions that joint venture hotels were not places for joint Chinese to visit, bred from a policy that banned them from even entering until the end of 1987, Holiday Inn launched an extensive advertising campaign in the People's Daily. It was the first foreign company, let alone hotel to do so, and the move was "extremely successful."

"By doing this campaign that said that we are in China for the Chinese people, our content of local business has shot up," says Riegger. There is still a barrier, but things are changing. The young in particular, he says, are adaptable. If you go to a Holiday Inn discoteque, these days, you will find that 80 per cent of the people are local Chinese.

Riegger is not worried about losing this new found wealth to an overheating economy. "As long as the periods of up and down are smooth, and that there is an overall upward trend, I don't think we have a problem."

The group is therefore keen to push ahead with increasing presence in the country. "We are actually very aggressively expanding at the moment,' says Riegger. "We hope to open another four hotels in the next 12 months." One of these will be in Wuhan, another will open in Zhengzhou, but until the contracts are signed, the other two locations will have to remain a secret. *

Holiday Inn Lido Beijing, Jichang Road, Jiang Tai Rd, Beijing 100004 Tel: (1) 437 6688, Fax (1) 437 6237
Holiday Inn Downtown Beijing, 98 Beilishilu, Xi chengqu, Beijing 100037 Tel: (1) 8322288, Fax: (1) 832 0696
Holiday Inn Crowne Plaza, Beijing, 48Wangfuj` Dajie, Deng Shi Xi Dou, Beijing 100006 Tel: l(1) 5133388,Fax:(1)5132513
Holiday Inn Yangtze Chongqing. 15 Nan Ping Bel Lu, Chongqing 630060 Tel: (811) 203380, Fax: (811) 200884
Holiday Inn Dalian, 18 Shen g Li Square, Zhonshan qu, Dalian 116001 Tel: (411) 2808888,Fax: (41X) 2809704
Holiday Inn City Centre Guangzhou, 28 Guangming Lu, Overseas Chinese Village, uanshiEast, Guangzhou 510060 Tel: (20) 7766999, Fax: (20) 7753126
Holiday Inn Guilin, 14 South Ronghu Road, Guilin 541002 Tel: (773) 223950, Fax: (773)
222101
Holiday Inn Kunming, 25 Dong Fen East Rd, Kum wing 650011 Tel: (871) 316 5888, Fax: (871) 313 5189
Holiday Inn Lhasa, No.1 Minzu Lu, Lhasa, Tibet Tel: (891) 24852, Fax: (891) 35796
Holiday Inn Yin Xing Shanghai, 338 Pan Yu Road, Shanghai 200052 Tel: 1)2528888, Fax: (21) 2528545
Holiday Inn Urumqi, 168 Xinhua Bei Lu, Urumqi 830002 Tel: (991) 218788, Fax: (991) 217422
Crown Plaza Harbourview Xiamen, 12-8 Zhen Hai Road, Xiamen, Fujian 361001 Tel: (592) 223333 Fax: (592) 236666
Bell Tower Hotel Xian, Southwest Comer of Bell Tower, Xian 710001 Tel: (29) 779200, Fax: (29) 718970
Holiday Inn Xian, No. 8 South Section, Huan East Road, Xian 710048 Tel: (29) 338888, Fax (29) 335962