Hard Rock International executives were here on March 1 to formally announce plans to open the Hard Rock Hotel Dalian in northeast China in 2018. The announcement begins a new partnership in a key market as Hard Rock begins to work on its expansion plans.
The Dalian hotel would be the first of a series of planned projects with local Chinese partner Luneng Real Estate Group, the property arm of Chinese state-owned power company Shandong Luneng Group, said Leong Wy Joon, SVP of hotel development for Hard Rock. Financial details of the deal were not provided by Hard Rock, which is privately owned by the Native American Seminole Tribe of Florida.
The 200-room Dalian property would mark the beginning of a five-year expansion plan by the Hard Rock brand in China and Asia. Joon told Hotel Management that Hard Rock and Luneng would work together under a mutually agreed-upon cooperation framework and would approach each project on a case-by-case basis.
Up and Down City Expansion
Hard Rock intends to expand its hotel operations into first-tier cities, such as Beijing and Shanghai, second-tier cities, including Dalian and Wuhan, as well as popular domestic tourism destinations, such as Lijiang. Work is currently underway on properties in Shenzhen and Haikou.
Joon said that in addition to size, the importance of music to particular Chinese cities would also be a consideration when choosing new markets for hotel properties. Hard Rock also announced that it would be teaming up with the Strawberry Music Festival to promote live music events across China.
Aside from Beijing and Shanghai, cities that fit the bill of having both a large economy and a thriving music scene and/or established music festivals include Chengdu, Changsha, Wuhan, Chongqing and Kunming. Spoiled for choice, Joon emphasized that Hard Rock does not plan on rushing into the China market.
“We won’t go in too fast,” he said. “If we expand too fast, we risk hurting our brand, and unlike hotels, we only have one brand.”
In the next five years, Hard Rock plans on growing its Asia portfolio significantly, expanding from 38 branded cafes to 53, while quadrupling its hotels from 5 to 20. It also intends to open two new casino hotels, most likely in Vietnam and Japan, which will join its existing casino hotel in Macau.
Daniel Cheng, Hard Rock SVP of business development, who recently joined the company after nine years with Genting Group, said the company is partnering with luxury resort brand Banyan Tree in Vietnam to create what he calls “Integrated Resort 2.0”.
Cheng was also very upbeat on the potential of Japan for Hard Rock casino hotels, noting that legislation opening up the country to casinos was likely to pass in the near term. Given Japan’s large population and relative wealth as well as its popularity with mainland Chinese travelers, the country appears to be fertile ground for global gaming.
“Japan is the next Macau,” Cheng said.