As the former COO of IHG’s Greater China region, Jolyon Bulley has a firm grasp on the explosion of outbound Chinese travelers and what it means for U.S hotels. Now the COO of the Americas, he shared with Lodging at the company’s recent brand show the latest on its strategy to target this segment.
How is the booming Chinese outbound travel market changing the global travel landscape? In 2013, about 58 million people were traveling outbound, and that’s just increasing at a rapid pace. It’s projected that by 2020 there will be 100 million outbound travelers per year from China. Initially, the travel patterns have been into Hong Kong and Southeast Asian destinations, Asia Pacific primarily, but now the hot destinations are Europe and the U.S., with the key gateway cities being the destinations they’re traveling to.
We’re seeing amazing change in the travel dynamic. A lot of that has to do with the maturation of the economy but also the transformation of China. They’re now moving to much more of a domestic consumption, and the middle class is rising, which therefore, makes aspiration to travel outside of China very high.
How is IHG addressing the needs of Chinese travelers? We’ve had 30 years of history in China, and we have big business there. Part of the reason for building a big managed business in China is to introduce our brands, which we nuance, to the Chinese consumers. We see the economic opportunity, but also once the Chinese customers know and grow to love our brands, they will be forefront in their mind as they travel internationally, which is really important for us. It’s growth in China, but it’s also growth for the outbound travel market.
We did a lot of work to find out what Chinese guests expect when they travel. They don’t want to travel into the U.S. and necessarily find a Chinese hotel. What they do want is the little thoughtful touches that they understand and appreciate when they arrive.
What are some examples of these thoughtful touches? There are simple things like slippers in the guestroom, green tea, bilingual in-room collateral, and Chinese TV stations. Then, you go outside the room, and it’s the thoughtful approach to the way we present the breakfast. A lot of people think to just put rice and noodles out and that may do, but the taste and texture have to be just right.
Food is very important to anyone, but to a Chinese customer, food is especially important. They really appreciate that sort of sense of home in an international environment.
And one of the other things that support the whole program is to make sure there’s a Mandarin-speaking staff person in the hotel. They can do some initial cultural training for the team and be a point of communication.
What’s the latest with Hualuxe Hotels and Resorts, the upscale brand designed specifically for Chinese guests? It’s all centered around relationships, business connectively, and dining, which underpins the real true essence of Chinese hospitality. We launched the brand in 2012, and we have 24 hotels in our development pipeline. We open our first two in December and January in China.
We intend to grow the brand in China. And if we can bring to life a well-known and respected true Chinese hotel brand, the potential to bring that out into the United States, Europe, and other parts of Asia is huge. We’ve already had a lot of the interest from owners and developers wanting to do that, but our priority is to establish it in China first.