Hyatt takes steps to gain ground in China

Hyatt Regency Xuzhou
Hyatt Regency Xuzhou. Photo credit: Hyatt Hotels Corp.

Almost 50 years after Hyatt opened its first hotel in China, the company has a solid footprint in the country. But 58 hotels with more than 19,000 rooms across seven brands in Greater China apparently isn’t enough for the global chain, and Hyatt has set its sights on further growth.

Earlier this year, Hyatt appointed Stephen Ho president of Greater China global operations, a new role within the company. In this capacity, Ho is responsible for growth and operations, talent development and owner relations throughout Greater China. Ho's interview with Forbes and other recent initiatives paint a strong picture of a company with a clear strategy to attract a lucrative demographic.

Organic Growth

Hyatt has seven of its brands in China, and Ho told Forbes the company is focused on brands that will capture the region’s ever-strengthening business traveler. “As the fast-growing commercial classes in China travel at an accelerated rate, we have successfully expanded our Hyatt Place and Hyatt House brands, allowing us to serve more business and corporate travelers,” he said.

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And with Hurun’s Chinese Luxury Traveller 2017 finding that 60 percent of China’s high-net-worth families are willing to spend more on quality accommodations, Hyatt also is focused on the luxury segment. “It’s very important we have a diversified brand presence and offerings to provide travelers with different experiences for different occasions,” he said.

Less than a month ago, Hyatt opened the Hyatt Regency Xuzhou in China’s Jiangsu Province as part of the 873-foot-tall International Finance Center, and opened the Hyatt Regency Beijing Wangjing, the first Hyatt Regency hotel in the Chinese capital. 

The company also sees opportunities for its Park Hyatt brand, and will open the Park Hyatt Shenzhen in 2019 on top of the South Tower of the Ping’An Financial Center in the center of Shenzhen’s Futian central business district, adjacent to the Convention and Exhibition Center. “There are Park Hyatt hotels in Suzhou, Nanjing and Taipei already,” Ho noted.

Acquisitions and Partnerships

These efforts aren't the only way Hyatt is gaining ground in China. The recent acquisition of Two Roads Hospitality also will help, thanks to the Alila brand, which already has resorts in Anji, Yangshuo and Wuzhen. “I would say, in particular, the Alila brand in Asia has, with a small base to start with, generated a tremendous amount of interest amongst developers in Asia—and we have a very, very strong network in Asia amongst business travelers,” said Mark Hoplamazian, president and CEO of Hyatt Hotels Corporation, during the company's Q3 earnings call earlier this month. Furthermore, he added, Alila will bring “significant additional representation” in Asian resorts to Hyatt’s portfolio.

Earlier this year, Chinese online travel agency Ctrip Group teamed with Hyatt to open its first flagship store on Ctrip’s website and mobile app. The online store allows more than 300 million Ctrip members to access Hyatt hotels in the Greater China region and will help boost the company's brand awareness among the demographic. 

“The collaboration presents a win-win setting for both companies and represents a milestone in the travel industry distribution archetype,” said Ray Chen, Ctrip’s hotel business unit CEO.  “The flagship store is the outcome of several months’ hard work by cross-functional teams at the two companies, including [research and development], product, marketing, legal and more, working collaboratively and quickly.”

China's Value

Hyatt’s efforts to grow rapidly in China make sense. Earlier this month, Euromonitor International reported China is set to overtake France as the world’s number-one tourist destination by 2030 as a growing middle class in Asia looks to spend more on travel. The market research group predicted 1.4 billion trips made in 2018, up 5 percent from last year. By 2030, international arrivals are expected to have risen by another billion, boosted by Beijing hosting the 2022 Winter Olympic Games.

But there also could be a downside to quick growth in one market—especially one that is currently in the crosshairs of the global economy. Euromonitor warned the U.S. tourism industry could face a hit if the trade tensions between the U.S. and China escalate.