U.S. hotel chains take initiatives to attract more Chinese tourists

Inbound Chinese tourists contributed 5% to the total market share of U.S. travel and tourism exports during 2010, and travelers from the rapidly emerging country appear to be occupying a far greater share of attention from leaders of major hotel chains.
Chains such as Hilton Worldwide and Starwood Hotels & Resorts Worldwide earlier this year announced programs designed to cater to the unique needs and preferences of Chinese guests.
While the programs have been met with success thus far, according to company executives, more important is their abilities to capture part of the 274% projected increase in inbound Chinese travelers to the U.S. during the next five years.
Some of that increase is due to a Memorandum of Understanding which in 2007 opened group leisure from China to the United States. Previously only individual tourists and group business could enter the U.S., said Julie Heizer from the U.S. Office of Travel and Tourism Industries during a breakout session at the 2011 International Hotel, Motel + Restaurant Show.
The move, in part, helped fuel a 53% increase in Chinese visitors to the U.S. from 2009 to 2010. China was the 11th market in terms of visitation to the U.S. during 2010 and eighth in terms of receipts (US$3.6 billion), according to the U.S. Office of Travel and Tourism Industries.
The Chinese traveler
Capturing a fair share of those receipts isn’t a matter of sitting back and waiting for the guests to roll in. It requires a proactive effort to better understand Chinese guests and ensure their experiences include some of the preferences and comforts of home.
Hilton Hotels & Resorts attempted to do that while launching its Hilton Huanying program. The company conducted a global research initiative, the findings of which were commissioned in a recently released blue paper.
“If Chinese people are more welcome around the world in every part of the travel industry, we’re all going to benefit,” said Andrew Flack, VP of global brand market for Hilton Hotels & Resorts.

Some key highlights from the blue paper include:

• Chinese outbound travel and tourism reached record levels in 2010, totaling 57.39 million, an increase of more than 20% compared with 2009.

• China is now the largest outbound tourist source country in Asia, having overtaken Japan.

• Total outbound tourism during 2011 is expected to reach 65 million visitor trips.

• During 2010, Chinese outbound tourists spent €35 billion (approximately US$47 billion) on their travels, up 14% from 2009. The figure is expected to reach €40.2 billion (approximately US$54.3 billion) during 2011, a rise of 14.6%.
As part of the IHM&RS panel, Flack outlined three additional insights from Hilton’s findings about the Chinese travel experience:

1. Shopping
Shopping is an extremely important part of the Chinese travel experience—but not for the material reasons one might expect. On the contrary, Chinese travelers shop to buy gifts for family, friends and business associates.
2. Food-and-beverage
The dining experience is another important aspect of Chinese culture. Flack emphasized the importance of authenticity in this regard. Chinese food as many Americans know it is a far cry from the offerings served on dinner tables on the other side of the world.
For this reason, Hilton created an authentic menu designed by Chinese chefs for its Huanying program. Offerings include such items as two varieties of congee with condiments, dim sum, fried dough fritters, fried rice and fried noodles.
3. Social recommendations
“It’s very important in Chinese culture to make the right choice and be seen making the right choice,” Flack said.

Chinese travelers rely heavily on social media to research travel.

According to Pierre Gervois, CEO of China Elite Focus, a Shanghai marketing agency specialized in targeting affluent Chinese outbound tourists “Hilton and Starwood hotels made the right move by targeting Chinese tourists. They must now have an in-depht social media marketing campaign to reach and unlock the potential of hundred of thousands of new Chinese customers, as well as explaing the core values of their brands”. Gervois added “Serving Chinese tea and noodles to Chinese guests is a first good step, but without a strong presence on the relevant Chinese Travel blogs and websites, it won’t bring much more new Chinese customers”
“If you’re marketing yourself in that market, you have to be very visible in social media channels and everywhere that Chinese people are searching for the right choice for them,” Flack also said.


Starwood Hotels’ Executives coming to China

Starwood Hotels & Resorts Worldwide, Inc. announced an unprecedented managerial endeavor to move its Senior Leadership Team to China for one month. From June 8th through July 11th, Starwood President & CEO Frits van Paasschen and the company’s top executives will be headquartered in Shanghai, where they will conduct day-to-day business on a 12-hour time difference with their “usual” operations in White Plains, New York. This unique relocation underscores Starwood’s game-changing growth in China, which recently became its second largest market outside of the U.S. and its fastest growing. The move also reflects Starwood’s innovative approach to cultivate a more global culture in a company that grew up largely in the United States.

“With properties in nearly 100 countries, Starwood is no longer an American company that happens to run some hotels overseas. Today, we’re a global company that happens to be based in New York,” said van Paasschen. “Eighty percent of our future pipeline is outside of North America, and nowhere is more emblematic of our global growth than China, where we will open one hotel every two weeks this year. China’s spectacular transformation is hard to grasp unless experienced firsthand – it’s the proverbial, ‘you can’t really understand a culture until you buy groceries there.’”

From their home base in Shanghai, van Paasschen and seven members of his Senior Leadership Team will conduct daily business in an unconventional effort to understand, appreciate and ultimately leverage different cultural perspectives and approaches to business. In addition, more than 20 Starwood executives from the U.S. and international locations will join the team throughout the course of the relocation. The group will delve into Starwood’s extensive business in China, meeting with local customers, partners and developers, while also touring new properties throughout the country.

“Starwood has a card to play with the growing number of affluent Chinese tourists, they still have a lot of work to do with adjustements in their global strategy and deeply understanding the expectations of this new generation of Chinese travelers. ” said Pierre Gervois, CEO of China Elite Focus.

Impact of Chinese Travel Market Extends Beyond its Borders
During its month abroad, Starwood’s Senior Leadership Team will also bolster the company’s guest loyalty outreach among Chinese travelers. As one of the world’s fastest growing travel markets, with 100 million outbound travelers expected by 2015, China will play an outsized role in global travel within the next decade. The country continues to be the richest source of new loyal travelers for Starwood, with Chinese enrollment in Starwood Preferred Guest, Starwood’s loyalty program, jumping 71 percent in 2010.

Most “Globally Fluent” Companies Will Win
Based on the anticipated success of Starwood’s managerial experiment in China, the company intends to implement a month-long global relocation annually. Its next high-growth target markets include Brazil, the United Arab Emirates and India.

“It is not just language that gets lost in translation, but also cultural nuances. The companies that will break away in an increasingly global world will be those that are most globally fluent,” said van Paasschen.

China Illustrative of Explosive Growth in Emerging Markets
Starwood’s global relocation is also a symbolic trip, as the company reaches a new milestone: for the first time in its history, Starwood has more hotels outside the U.S. than inside. As the world’s most global hotel company with more hotels in emerging markets than its competitors, Starwood is on the frontlines of globalization, and is experiencing explosive growth in India, the Middle East, Africa and of course, China. Starwood enjoys a first-mover advantage in China dating back to 1985 with the landmark debut of the Great Wall Sheraton Hotel in Beijing, which was the first international branded hotel in the People’s Republic of China. Today, Starwood has more than 70 hotels in China flying eight of its nine brands’ flags and another 90 properties in the pipeline.