Wall Street Journal
- July 11, 2011
By
ALEXANDRA BERZON
"Red Carpet for the Chinese - Hotels Add Menu Items,Translators, Other Services for
Growing Travel Segment"
The traditional Chinese rice porridge, called congee, will soonbecome a staple of hotel
breakfast buffets in America and abroad as U.S.-based hotelchains compete for
growing numbers of Chinese travelers.
The Chinese dish is part of a set of broader initiatives toattract Chinese travelers at
hotel giants Hilton Worldwide Inc. and
Starwood Hotels & Resorts Worldwide
. This summer, both hotel companies are rolling out hospitalitystandards centered on items
that cater to Chinese guests in hotels across the world
Congee breakfast is among the Chinese-style
amenities at the Hilton in San Francisco's
financial district.
Starwood plans to announce a program
Monday called "Starwood Personalized
Travel," which will require the company's
1,051 hotels—including the Sheraton, Westin
and W chains—to offer a set of specific
services for Chinese travelers, including in-room tea kettles,slippers and translation
services, in addition to new menu items.
The program will start at 19 hotels in cities such as New York,London, Mexico City,
Seoul and San Francisco, where Chinese business is rapidlygrowing. The program will
cover all Starwood hotels by the end of next year, the companysaid.
Hilton on Monday plans to announce a program for its HiltonHotels & Resorts brand
called "Hilton Huanying"—from the Chinese word for "welcome."Hilton hotels can opt
into the program. Those that do—30 so far—must provide a frontdesk worker fluent in
Mandarin and a Chinese television station, as well as a fullChinese breakfast including
dim sum, congee and fried dough fritters, among other items. Itwill begin in August.
"Chinese travel is going to provide one of the greatopportunities that we'll ever see in
the business," said Hilton Chief Executive Chris Nassetta.
Marriott International
Inc., meanwhile, is planning a new Chinese breakfast programin
the U.S. this fall that will include information for hotels onhow to create a Chinese
breakfast.
Chinese foreign travel is still a small segment of overallglobal travel. But these moves
by hotel companies signal the growing importance that Chinesetravelers are expected
to have in the coming years for the travel industry. Theyreflect both the leap in China's
economy and the loosening of restrictions on travel since asrecently as a decade ago,
when Chinese were not allowed by their government to visit mostcountries.
"Outbound travel from Chinese is the next wave," said StarwoodCEO
Frits van
Paasschen
.
The changes in part follow a script from the 1980s. As Japan'seconomy boomed, hotels
in many cities in the U.S. and around the world added Japanesebreakfast items such
as rice, dried seaweed, pickled vegetables and miso soup totheir menus.
The Starwood and Hilton Chinese programs are more formal andreach across their
portfolio of hotels. Attracting the new travelers is also urgentpriority as growth in travel
dollars from many markets softens.
Global hotel brands have seen significant pick-up this yearfollowing deep declines
during the downturn. However the boost has been far greater inAsia than other regions,
reflecting in large part the growth of travel among Chinese.
In the first quarter of 2011, for example, Marriott saw revenueper available room in Asia
increase 17.2% compared to 5.8% in North America.
According to the U.S. Travel Association, 802,000 mainlandChinese residents visited
the U.S. in 2010, a 53% increase over the prior year. In 2005just 270,000 Chinese
people visited the U.S. The Department of Commerce expects thosenumbers to reach
994,000 in 2011. The U.S. received $5 billion from Chinesevisitors, according to the
Association, a 40% increase over 2009.
Japanese visitation in 2010 was much larger—around 3.1 million.Yet the trends are
divergent. From 2006 through 2009 travel from Japan declinedeach year, finally in
2009 reaching the lowest point since 1988, according to theTravel Association.
After Starwood executives noticed an enormous recent jump in thenumber of Chinese
subscribing to Starwood's loyalty program, a team led by MattGaghen, Starwood's vice
president of brand management, spent the last year researchingthe Chinese market
and discovered that language and food were two of the mostimportant issues for
Chinese travelers.
As such, all Starwood hotels are to beginning efforts to hire atleast one person on staff
who speaks a Chinese language. Chinese guests will receive anote from the general
manager translated into Chinese that offers the amenitiesavailable to them, such as tea
kettles, razors, toothbrushes and combs.
Since Starwood generally doesn't own hotels but sets standardsfor them, the changes
could mean a cost increase for hotel owners in some places thatdon't yet see many
Chinese travelers.
"We're planning and investing in this to get ahead and to appealto Chinese at the
outset," Mr. Gaghen said.
Questions
25 possible points, 5 points per question.
1.
What services are hotel chains adding to cater to Chinesetravelers? Identify 2-3
services that you can think of that are not mentioned in thearticle.
2.
What types of marketing research would you recommend to hotelchains to better
understand the services that Chinese travelers will want andexpect?
3.
Besides hotels, what other firms could benefit from the increasein Chinese
travelers, and how should they tailor their services for thismarket?
4.
If your future employer is a firm that targets Chineseconsumers, what skills and
experience will you need to contribute to your employer'sefforts?
5.
Which aspect(s) of the business environment (economic,technological,
sociocultural, political/legal) are being affected the most inthis article? Provide
specific examples.
