Since opening in 1990, Okura Garden Hotel has attracted not only the who’s who of the Japanese business world, but a number of world leaders as well. Russian President Vladimir Putin, former French leader Jacques Chirac and scores of Japanese prime ministers have all stayed at the 492-room hotel. Okura General Manager Hajime Harada talked to CHINA ECONOMIC REVIEW about the changes the hotel has seen.
Q: How has Okura made the transition from Japan to China?
A: Okura had already set up operations in the Netherlands and Guam, so we had international experience, but China was a different story. Back in 1990 there wasn’t much of a services industry so we had to teach our Chinese employees how to think of the hotel industry as a service industry. To help, we opened an internal hotel school.
Q: What trends do you see in the habits of business travelers?
A: Currently, most of our guests are business executives, 60% of whom are Japanese. Recently, we’ve had lots of guests demanding internet access so we provide free internet connections in executive and suite rooms. Also, visiting businessmen often have a hard time adjusting to China’s water. At Okura we treat all the water, so you can even drink straight from the tap. Overall, travelers want comfort and security, and we provide that.
Q: What challenges have you faced as a Japanese luxury hotel brand operating in China?
A: As a Japanese hotel that attracts a lot of Japanese guests, there’s always a risk that national incidents – SARS, bird flu or when anti-Japanese sentiments are high – will see buisness suffer because fewer Japanese will travel to China. To hedge that risk, we’re diversifying our client base to attract more guests from Hong Kong, Taiwan and the West.
Q: Is staff turnover a problem?
A: For a five-star hotel, we have very low turnover. We only hire fresh school graduates, so we can develop loyalty and a team spirit from the beginning. We also rate all employees on their foreign language skills and this factors into our compensation scheme.
Q: After the 2008 Olympics and 2010 World Expo, will there be enough demand to sustain the large luxury hotel growth in China?
A: Ahead of those two events, we are expecting 3% growth year-on-year. In 2008, Shanghai’s going to have 16 new hotels with 6,400 rooms, so the market is becoming more competitive. We’re confident we will stay successful, especially since our rooms have just been refurbished. Guests will also be drawn to our 30,000 square-meter garden – a rarity in the heart of Shanghai.