I write a lot about the hotel development scene in China and talk to a lot of people involved in gauging traveler trends there, but until recently I had never traveled to China myself. At the end of June I took a trip to Beijing and Shanghai, China, and to Ulaanbaatar, Mongolia, to see for myself what I have been writing about for years. It was an amazing, eye-opening experience and I’d like to share some of my impressions with you.
I, along with three other hotel industry journalists, took the trip as guests of Best Western International. We stayed in Best Western properties in our three destination cities and learned a lot about the company’s growth in that region [see the story on page 16]. But the bigger lessons learned were about the intricacies and challenges of hotel development in China, and about the issues that really have an impact on Chinese travelers, both within their own country and here in ours.
First of all, there are a lot of people in China. While it is a huge country, so much of its development is concentrated along its Eastern coast, anchored by Beijing in the north and Shanghai near the south. These two cities crawl with people—young people going to work, families traveling by motorbike and elderly people crowding buses.
These are the people, the growing middle class, that will have a dizzying effect on global travel in the future. Their role as travelers, as I learned on this trip, is linked so closely to the country’s economy, social and employment practices. In every hotel lobby, I saw a constant influx of people. There were business travelers, but the majority were Chinese leisure travelers—extended families and groups of friends together.
William Dong, the president and CEO of Best Western China, told us that leisure travel within the country is growing in part because highway development makes road tripping easier, but also because more employers are giving people paid vacations. As a result, so many more people in China now are able to visit tourist destinations in their own country, often for the first time. As people get comfortable and have the money to travel relatively close to home, they get the bug to travel overseas. Despite visa and cost restrictions, more outbound Chinese travel to the U.S. every year.
In a way, the hotel development in China is a little bit like it was here 30 - 40 years ago, as roadside hotels grew to accommodate traveling families and business hotels sprung up to cater to a newly mobile workforce. So take that American hotel renaissance and multiply it times 100 and you’ll get an idea of the power of the Chinese traveler.
What does this really mean for hotels? My very basic, simple take is that the companies that can gain the midscale Chinese traveler’s business in his own country will be the ones who can make that business expand stateside. There is opportunity in this midscale segment, but it’s not a free and open zone. There is plenty of competition from growing Chinese brands like Jin Jiang and Home Inns.
Plus, doing real estate business in China is tricky. Small U.S.-based brands with a handful of properties aren’t going to be heading there anytime soon. But if you’re at all involved with the large multinational brands and companies that are doing hotel business in China, you’ll learn a lot by taking a look at their business there. Where do Chinese travelers’ loyalties lie? How are they booking rooms? If you tune into this now, you’ll be better off down the road when welcoming Chinese visitors to your hotel later on.