UK's luxury hotel game is being put on notice by the Chinese.
A recent study by the British Hospitality Association, alongside credit card group Discover Global Network, found that while France welcomes more than 1 million visitors from China per year, the UK only receives 328,000 Chinese visitor applications.
In response, the BHA is advising UK luxury hotels to invest now or miss out.
The comment came as the Mandarin Oriental Hyde Park London embarked on an 18-month £85-million refurbishment program designed, its owner said, to cement the European flagship hotel “as one of the leading luxury hotels in the world.”
Figures released by VisitBritain show that July 2016 was the highest month ever for overall inbound tourism to the UK, with 3.8 million visits, up 2 percent on July last year. The falling pound is expected to drive further inbound tourism.
“London is the greatest city in the world, but it’s lagging behind its European neighbors in terms of attracting Chinese tourists and it’s time to take action," said David Morgan-Hewitt managing director of The Goring, located in London's posh Belgravia neighborhood. "Hoteliers want to capitalize on what is likely to be a much more mature market in five or 10 years’ time, but we need to be proactive today."
The report found that travelers from China were currently focused on the three- and four-star market, preferring to spend their money on goods rather than accommodations. This is expected to change in around five years’ time, when the market matures, but, the study warned, education of the value of luxury hotels was key, as well as identifying the luxury service that Chinese guests were looking for.
This included, as the report’s co-authors would attest, being able to pay with their own credit cards, as well as familiar food and drink and local speakers on hand. In addition to luxury service, guests are also looking for “a strong focus on technology.”
“It doesn’t matter how many familiarization visits you do, how many times you bring [travel] agents down, the Chinese are very, very price sensitive and very tech-savvy when it comes to hotels—they want the latest docking stations and the smart TVs,” said Debrah Dhugga, managing director of the Dukes Hotel, in Mayfair.
The report was backed by an earlier study from InterContinental Hotels Group, which forecast that, by 2023, 62 percent of total Chinese outbound travel would be leisure-driven—a major shift in the purpose of travel for outbound Chinese away from business—with per-trip spending expected to grow nearly 75 percent, with a continuing shift in preferences towards higher-cost accommodation and upscale shopping.
That proved to be actionable intel for IHG, which, in 2012, launched a China-focused luxury brand called Hualuxe. It plans to open in 100 cities across Greater China over the next 15 to 20 years, and over time, introduce the brand to key international destinations, such as London and New York. As part of efforts to appeal to the Chinese market, the hotels put focus on tea rooms over bars, with intimate dining rooms and lobbies made into gardens.
Inside the Mandarin's Renovation
At the Mandarin Oriental in Hyde Park, London, the company’s Hong Kong-based owners have the inside track on China’s outbound market. The 120,000-square-foot refurbishment will be carried out in two nine-month phases, with the first phase covering all rooms in the Knightsbridge wing and the second phase covering rooms overlooking Hyde Park. During the process, two penthouse suites will be added to the hotel, which has 169 rooms and 25 suites.
Vinci Construction has bought together a team of firms specializing in renovating luxury residential and hotels under the new Plendi brand. Bec and Bourneuf will deliver outdoor woodworking, the Ildei Sfim will supply and fit marble for interiors while Interna will be responsible for finishings and Gohard gilding.
The bedrooms, suites and public areas will be designed by Joyce Wang, who has previously worked with the group on The Landmark Mandarin Oriental, while the restaurants and Spa will be updated by Adam Tihany, who worked on their current incarnation.
Tihany Design is responsible for the soft renovation of Bar Boulud, Dinner and MO Bar, as well as a more extensive refurbishment of The Spa. The company told us that, with the spa, the aim was to update the guest experience through the wellness facilities. Tihany Design was asked to design an extension of the day spa area and a soft renovation of the existing treatment room and changing rooms in the downstairs area. New features include a VIP suite, which has a bathing area with steam shower and Rasul throne, as well as a Spa Studio for hairstyling, mani & pedi treatment and twin beauty treatment rooms.
The firm, based in New York and Rome, drew from traditional Chinese motifs like ‘qipoa’ (cheongsam), ‘chinoiserie’ and the harmony of yin and yang to create a welcoming and elegant space.
The group said that the project challenged them in terms of: “Blending all the new features in a natural and harmonious way, creating a sense of continuity with the existing facilities while refreshing the overall design through a warm color palette and gentle, soft line and design elements.”
The New Luxury
While the London market is being warned about the expected rise in outbound tourists from China, the consumers’ idea of what luxury is continues to evolve. Dexter Moren, director of London-based design group Dexter Moren Associates, told us: “Intimacy is the new luxury—small club like spaces over vast airport-sized lobbies.”
Jacqui Kirk, director, Dexter Moren Associates, added: “Modern luxury is much more about experience, discovery or time, which is becoming ever more precious. Many of the major hotel groups have started to successfully introduce lifestyle brands, firmly moving away from the cookie cutter approach, to create bespoke design narratives which better reflect each hotels individual location.
“We’re seeing an increase in international travelers who do not want to show off their wealth. Increasingly many new brands are targeting the millennials, where experience, tech and design play an important role.”
The choice available to the consumer is growing by the day. Those who would be forward-thinking must ensure their crystal balls are solid crystal and gilt-edged.
Katherine Doggrell is an editor at UK-based news analysis service Hotel Analyst.