The push is on to attract what are assumed to be millions of Chinese travelers over the next few years. At the recent NYU Hospitality Investment Conference in New York, China was the dominant subject. While that country is only part of the globalization of the hospitality industry, it is the biggest part -- both in terms of the great expansion of North America-based brands and as a source of guests for hotels that are doing better but still bumping along the bottom as far as room rates.
So powerful is the China factor that Starwood's top executives recently spent five weeks in Shanghai seeking to learn about the market. The industry faces two challenges:
1) Coming up with the right product for the Chinese market. Brands like Holiday Inn, Hilton, Sheraton and Super 8 are already strong in China, but they will be subsumed by domestic brands unless they manage to be incorporated into the Chinese consumer's mindset.
2) Marketing to those millions of potential outbound travelers -- often people who have never left their home country.
No question, many other brands will be following Starwood and Hilton in their outreach to Chinese travelers, but how much of their efforts will be similar? Take a look at these two brands. The Starwood initiative has been launched at 19 gateway cities around the world. It includes in-room tea kettles and instant noodles, slippers, translated welcome materials and on-site translation services. Restaurant menus will also be made available in Chinese and feature familiar favorites like congee, a Chinese breakfast delicacy.
At Hilton, the program is called Hilton Huanying, from the Chinese word for "welcome." Beginning in August, Chinese travelers will find amenities, service standards and dedicated staff training at 30 hotels involved in the launch.
Among the touches are: front desk associate fluent in Chinese; tea kettles, slippers and Chinese TV channels in the room; congee and chopsticks for breakfast.
So -- quite a few similarities. Make no mistake. The Chinese are already arriving. Chinese business at the W New York in Times Square grew 173% last year (from a small base, of course) and the increase at the St. Regis Monarch Beach in southern California was 140%. The Chinese, according to Starwood, are also growing in travel to Latin America (370% at a Sheraton in Mexico City and 264% at a hotel in Buenos Aires.)
Chinese enrollment in Starwood's loyalty program grew 71% in 2010, and they are now the second-largest base of active members, surpassing the U.K.
There are obstacles. It remains extremely difficult for a Chinese traveler to obtain a visa to the U.S. As Frits Van Paasschen, CEO of Starwood said, "The U.S. is the top international destination of choice for Chinese travelers and needs to better capitalize on profound travel trends from China and other markets like Brazil and India. Yet we make it incredibly difficult for travelers to visit. Visa reform doesn't require building infrastructure and is, in fact, totally self funding. This is about opening the door a little wider to make it easier for global outbound travelers to visit the United States."
Despite all that, the Chinese will be coming. Tea Kettles and congee are fine, but the stakes are really high. The U.S. brands that really make inroads in China will have a jump start on Chinese travelers who will seek out those same brands when they travel. But the marketing message for those travelers will also be crucial, and will probably require some trial and error.
We've heard for decades about the marketing errors made by car companies and others as they sought to penetrate markets like Japan, but in China the stakes are higher, and mistakes will probably be costlier.
It's a situation where both speed and caution are the bywords, and will be worth watching. While Hilton and Starwood have come up with good basic approaches, all brands will have to find ways to distinguish themselves because everybody will be trumpeting their Chinese speakers, tea kettles and congee.