There are a total of 11,706 star-rated hotels in China by the end of 2012. Two hotel executives talk about how they stand out in an increasingly competitive MICE market in China, Shanghai in particular.

Q: How large is your current portfolio in Shanghai and how do you expect it to grow over the next few years?

Wong: Currently Hyatt operates four hotels in Shanghai; they are Park Hyatt Shanghai, Andaz Xintiandi Shanghai, Grand Hyatt Shanghai and Hyatt on the Bund, under three brands. Altogether they provide the Shanghai market with slightly more than 1,700 rooms. 

In our 2014 expansion plan, we will introduce a Hyatt Regency brand to the Shanghai market sometime within the first quarter of 2014.

And we are going to introduce two new brands to Shanghai in 2015, Hyatt Place and Hyatt House. These two brands target business travelers and extended-stay travelers and are the perfect venue for MICE events.

Chung: In Shanghai, We have 10 hotels in operation now, and have another four hotels in the pipeline.

Q: Are there any campaigns you are going to launch this year to further strengthen your brand image as competition among internationally branded hotels continues to intensify with more hotels being opened across the city?

Wong: In December last year, Hyatt introduced a tailor-made initiative, the Hyatt Nin Hao program for Chinese travelers. The Hyatt Nin Hao program offers Chinese guests Hyatt’s signature authentic hospitality by providing the tastes and comforts of home, and more importantly, the best local insights, wherever they are in the world. Key components include access to a Chinese-speaking Guest Service Officer and a 24-hour Mandarin hotline in times of need; guestroom amenities such as a selection of Chinese teas and a kettle, slippers and a dedicated television channel with Chinese programming; in-room menu featuring Chinese comfort food; and a customized compendium in Mandarin with detailed information on the hotel facilities, local insights and useful information. The highlight of the Nin Hao program is that it will provide Chinese guests a most authentic cultural experience through interaction with dedicated service associates. A tailor-made guide is included in the Mandarin compendium, featuring a comprehensive list of the best sights and sounds that the host city has to offer. The hotel concierge is also trained to give Chinese guests the best local insights with culturally relevant tips that will make their visit much more memorable.

We will further upgrade this program by launching a collaboration with China UnionPay in the coming month. Through this collaboration, by providing more convenient facility and service, we hope to make our Chinese guests feel more at home when they travel around the world.

Chung: Our loyalty program, Wyndham Rewards, and effective group marketing programs are important components, but consistent service and value for the money are vital as well. We are focusing on creating an experience for our customers during every stay in our hotels. We have been constantly reviewing and enhancing our services based on our philosophy, “taking care of you like family.”

Despite our different tiers of hotels in Shanghai, the corporate sales team promotes all hotels for group deals and overseas/local meeting organizers. All hotels are supplementing each other. Our room inventory in Shanghai is close to 3,000 rooms and our available meeting space tops 10,000 square meters.

Q: What do you think of the supply-demand situation in the city’s upscale and luxury hotel market? Are there any challenges you are encountering to maintain long-term, solid growth here?

Wong: We have been experiencing very intense and highly competitive markets ever since the completion of the World Expo 2010 Shanghai. Although the market has been extremely competitive over the past few years, we have seen the quality of buyers grow to a higher level. We strongly believe under the continued growth of China’s economy together with upgrades of Shanghai infrastructure, we can all enjoy welcoming more guests not only from inbound markets, but also from inside China as well.

China is growing fast, as is Shanghai. With the recently announced Shanghai Free Trade Zone, we will definitely welcome more opportunities for the city. Competition is so intense and our biggest challenge right now is how to stand out. With the inherited DNA of providing authentic hospitality and our amazing people, we have confidence in our future in China.

Chung: Research released in May with figures as of the end of 2012 by the China Tourism Research Institute stated there are a total of 11,706 star-rated hotels in China with 654 five-star, 2,201 four-star, 5,545 three-star and 3,306 two-star, with a total saleable room inventory of 1.6 million.

Over the past 10 years, China’s star-rated hotel growth rate is at 10 percent, amongst which five-star hotels’ annual growth rate is twice that, at 20 percent. Zhejiang and Jiangsu provinces and Shanghai are areas in which the tourism industry is booming with 31 percent of the country’s star-rated hotels; while the northwest and southwest star-rated hotel supply will maintain a 6 percent growth rate with its recent rapid development.

The research reported the top cities/provinces with five-star hotels are Guangzhou (60), Jiangsu (68), Zhejiang (66), Beijing (62) and Shanghai (55).

The same report also indicated that 2012 foreign arrivals to China exceeded 31 million, a growth of 14.8 percent annually. With further maturing infrastructure, the government’s firm direction on making Shanghai a first-class international financial center, and the continual influx of high-caliber professionals, the increase of supply will lead the hospitality industry to a higher level. More focus will be placed on the human element of Asia’s friendly and warm services to rise above the competition.

Q: Do you consider MICE business an important engine for your future revenue/profit growth? How do you expect the overall MICE market in Shanghai to expand over the next couple of years and how do you anticipate it will impact your own business?

Wong: MICE has always been an important business stream for larger-scaled hotels, particularly those with great meeting facilities. We strongly believe it will continue to grow, as all industries still must train their staff and employees, motivate individuals and teams, strengthen team spirit and expand business networks through organizing MICE events. We can see both the scale and quality of MICE business in Shanghai continuously improving.

Chung: In spite of the pressure from recent global and domestic economic growth slowdowns, Shanghai is still in the spotlight with expanding business opportunities worldwide. Additional A380 aircraft operating at Pudong International Airport is a sign of the growth.

The China Hotel Association indicated that MICE business is down by 28 percent year-on-year, with the major drop being government-related business. With the drop in government spending, the trend for MICE business changed, with the major contributions coming from local enterprises with an average length of stay of three days for work conferences and training.

MICE business not only brings in room revenue, but also incremental revenue for food and beverages. These related boosts to revenue are definitely important. We will continue to solicit MICE business from other markets and industries. We believe that MICE business will continue to make meaningful contributions to Shanghai’s hospitality-related industry.