The global tourism sector has seen a revival in business travel in the first half of the year. This follows a troubling 2009 for hoteliers who saw occupancy rates tumble as the economic downturn brought corporate spending and business travel grinding to halt.
But now, as the dust settles, the landscape of the tourism industry is changing. While most economies move forward with caution, China is charging forward at a rapid pace – and so the country’s expanding base of affluent consumers is the travel sector’s savior.
Japan, for example, significantly lowered its visa regulations for Chinese tourists in June, a move that is expected to permit another 16 million households – or 10 times the size of the previous potential pool of travelers – to apply for entry. Travel visas used to be distributed only to wealthy Chinese with relatively high incomes, but the massive influx of visitors and their increasing purchasing power became too tempting to refuse. Visitors from China spend about US$1,300 per trip, compared with US$790 for Taiwan visitors and US$280 for Americans, according to the Japan Tourism Agency.
Likewise, hotel chains are also hedging their bets on the Chinese market, aware that domestic clientele are fast supplanting foreigners as the majority. But this changing guest demographic must be met with a changing mode of service. The onus is on the tourism industry to understand this emerging breed of Chinese consumers who have an appetite for luxury goods and services, and respond accordingly.
Many hoteliers plan to significantly expand their presence throughout the country. Marriott International, one of the world’s largest hotel companies, expects to open 60 hotels across six brands in China by the end of this year. Within the next five years, it will double that number to 120 properties. European hotel company Accor, which has brands such as Sofitel, Novotel and Mercure under its helm, will open 17 new hotels in China this year, focusing on smaller third- and fourth-tier cities. Starwood Hotels, with brands such as Sheraton, Westin and St. Regis, has another 70 hotels under development or construction.
Yet hoteliers must do more than just designing blue print plans and constructing lavish facilities. Catering to local tastes can be a challenge for foreign brands, and a balance between Western service standards and the expectations of wealthy Chinese needs to be attained. Is a fruit plate in a guest’s room a more considerate gesture than a complimentary cocktail? Should guests be greeted in Mandarin or English?
In this burgeoning market, luxury hotels will have to battle hard for consumer favor. Consistency and giving face are two keys to success: Tailoring luxury services to affluent consumers in China means making every effort to give personal attention, ensuring that guests feel like they are known, recognized and enjoy a special status of their own.
At the same time, this is a relationship that needs time and fine tuning. The luxury market, while booming, is still maturing. High-end hoteliers in China must take the reins. Just as Tiffany & Co taught the US why silver is an object of timeless beauty and opulence, Ritz-Carltons and Hyatts have to find a way to show China what five-star service is really about.
