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The Welcome in Chinese

The major hotel companies are gearing up to attract Chinese guests. Here’s an update as to what they are doing!

Friday, February 08, 2013
Erin Kim
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Several months ago, I wrote an article focusing on the amazing increase of outbound Chinese tourism into the United States, and its economic significance. The article spotlighted the inefficient visa obtainment process that was quite challenging for enthusiastic Chinese tourists, which was also serving as a roadblock for potential job creation for the country. In summary, the article optimistically predicted positive changes in the near future in accordance with President Obama’s January-2012-released executive order to considerably increase tourism and travel in the U.S. The federal government has made it clear to potential visa seekers that it is making a concerted effort to streamline the visa process. A video clip entitled “Visit America: It’s Easier Than You Think” was created in May, and can be found on the Visa News section of Travelstate.gov (the official government page for visa information).

A major consequence of the aforementioned initiative was the July announcement by the U.S. Department of State that it processed a million tourist visa applications from China since October 2011, an increase of 43% from the same period a year earlier. This number, however, is surely bound to grow as the streamlined visa process gains full momentum. So, is the country ready for the big wave?

As one of the most mature business segments in the U.S., the hospitality industry appears to be prepared for the coming surge. While hotels in top tourist destinations such as Hawaii have already been offering foreign language speaking front desk staff as well as food & beverage options customized for important tourist groups including Chinese, major hotel companies have gone a step further to present a refined standard under a memorable name. The first to garner my attention was Hilton’s Huanying Program. “Huanying” means “Welcome” in Chinese; while slightly more sophisticated than “Ni hao” (“Hi” or “Hello”), any Chinese language speaker would comprehend and remember. This spurred my interest in learning how various companies formulated such a standardized program, which would be implemented among many, if not all, of their properties. This article spotlights three major hotel companies easily recognized in the U.S.: Marriott, Hilton, and Starwood.

The Programs
Hilton’s Huanying (“Welcome” in Mandarin) and Starwood’s Starwood Personalized Travel (SPT) were both announced in July 2011. Though Marriott has long been offering Chinese breakfast items at select properties, it announced a full-fledged program in July 2012. Each presentation contains similarities. See below table for a summary of those offerings that are communicated in their respective website.

Figure 1. Summary and Comparison of Offerings - Li Yu, Huanying, and SPT

Marriott Li Yu

Hilton Huanying

Starwood
Personalized Travel

Chinese speaking staff

All programs offer Chinese speaking staff to assist guests from arrival to departure, facilitating check-in, check-out, transportation or events arrangement

Available in Chinese

Hotel service directories Local area information

Hotel and local information are communicated via Chinese speaking staff; additional information in writing prepared by each property

Chinese language collateral comprised of local area information including shopping, sightseeing and key hotel information are available

Chinese breakfast

Dim Sum
Congee
Fried rice
Etc.

Dim Sum
Congee
Fried rice or noodles
Fried dough fritters
Hard broiled eggs
Fresh fruit
Chinese tea & soy milk

Congee
Rice and noodles
Etc.

In-room amenities

Tea kettles & tea
Slippers
TV Channels
Instant noodles
Newspaper
Asian-sized bathrobes, pajamas

Tea kettles & tea
Slippers
TV Channel

Tea kettle
Slippers
Instant noodles

Reach

At select China hotels since June 2012; at select Asia hotels as of December 2012
As of December, 2012, the official website does not list any U.S.-based properties

At 27 U.S. hotels as of December, 2012; 70 hotels worldwide.

At all properties around the world (approximately 1,100 hotels)

Overall, the standard amenities appear to be quite similar; however, an enormous amount of collaborative effort in each company brought them to fruition. The question remains, how do you derive a list that does not overwhelm or under-serve a newly named program that is rather uncommon historically? What does it mean for each of the relevant parties? The following analyzes the topic from the perspective of each of the participants in this program: the hotel company; the individual property (often, a franchisee), and the guest.

From the hotel company’s perspective:
When Marriott began to address the need to better serve Chinese consumers, authenticity was their primary objective. Consequently, to achieve this goal, they selected an advisory board comprised of Chinese associates in both China hotels – utilizing their worldwide portfolio – and other Asian hotels that experience a high volume of Chinese travelers. Marriott also asked the staff of properties in the US and Europe to share their insights on what their Chinese guests were seeking when staying in countries far from their homeland. Marriott then formulated a set of common deliverables that were frequently requested by Chinese guests, and Li Yu was born.

Hilton Huanying was developed based on a similar approach. With decades of experience in China, coupled with comprehensive proprietary research (both internal and third-party), Hilton Hotels and Resorts laid the cornerstone step by step. Feedback from customers, operators, travel agents and wholesalers in mainland China as well as visitors to popular destinations coalesced to originate a well-edited list of hotel amenities and services that became the final draft. Then, Hilton embarked on a three-month beta test in Los Angeles (Hilton Los Angeles/San Gabriel), London (London Hilton on Park Lane) and Seoul (Millennium Seoul Hilton), which established that Hilton Huanying would be successful, and the final list was ready to be launched. Initially launched by Hilton Hotels & Resorts (a flagship “brand” of Hilton Worldwide hotels), this program is available for all Hilton Worldwide hotels

In Starwood’s case, the specifics of the program evolved from hotel staff contributions; a Chinese program development task force; focus groups in China; operators; and a call center in China. Why the call center? The call center was an integral component in this initiative as the front line receivers of voices – consisting of Starwood guests and travel agents registering requests and complaints. Ultimately, it became the data source for developing the program. Offering the most streamlined list of the three programs, Starwood focuses on two initiatives: 1) accommodating basic needs, and 2) easy execution.

Unlike its counterparts that took a more “selective” approach for participating hotels, Starwood aspired to establish a broad-based program that would be easily applicable to all hotels in its portfolio. After a successful pilot test in key gateway cities around the globe, in 2012 Starwood rolled out Starwood Personalized Travel to its nearly 1,100 hotels worldwide. More tailored services are offered in countries such as China itself and Indonesia where Chinese travelers’ demand for customized service is much higher, while SPT amenities are provided “upon request” in the U.S.

From individual property’s perspective:
It is not expected that every hotel in the U.S. will experience a 50% to 100% increase in the number of Chinese visitors such as those properties located in key tourist or business destinations. A serious question to pose is what this new program will mean to individual properties that are not popular with Chinese travelers.

Let’s begin with Starwood, which made the program a required standard for all properties. In its embryonic stages, Starwood admits to receiving complaints from its member hotels. However, individual hotels soon realized that the preferred amenities had a positive impact even when catering to a small number of Chinese travelers. Though hotels are not mandated to furnish every room with the amenities, they are encouraged to maintain an adequate inventory to supply upon request.

For Marriott and Hilton, global participation by hotels in the respective Li Yu or Huanying program is voluntary. To maximize the benefit of such carefully developed programs, however, the corporate offices identify and solicit participation from particular hotels with significant business from Chinese travelers.

Now in its introductory stage, Marriott is rolling out the program primarily in the brands of J.W. Marriott, Marriott, Renaissance, as well as Courtyard in the Asia Pacific region. Marriott noted it will be implementing the program based on need in the U.S. In fact, properties with heavy Chinese traffic already offer certain amenities at their discretion. As noted in the table, Hilton Worldwide’s U.S. hotels participating in the program include brands such as Waldorf=Astoria, Hilton Hotels and Resorts, Embassy Suites, and DoubleTree by Hilton at select locations.

To be “certified,” or listed on the web as one of the properties offering such program amenities, the hotel is reviewed by the respective corporate brand management team to ensure the hotel team understands the key elements to achieve compliance. Property audits are conducted to ascertain the hotel is in compliance with brand standards. Frequent communication between the brand management team in each region and property reinforce the elements to ensure hotels are able to meet the needs of Chinese travelers.

All three companies noted that hotels do not pay additional program fees to participate.

From the Guest’s perspective:
While the Huanying, Starwood Personalized Travel, and Li Yu seem to have achieved a decent buzz on news articles, they are rather discreetly presented in the reservation websites or property-specific pages. Is this intended to be a secret code for those who are steeped in hospitality industry news? As a point of fact, the author enjoys congee and dim sum, but is not Chinese. How could a hotel perceive that one is Chinese or a Chinese language speaker and will prefer the carefully strained Chinese amenities?

All companies reiterated that there is no discrimination as to nationality in taking advantage of these programs. You simply make an advance request. However, the program was designed for the large number of Chinese travelers who book through Chinese government travel agencies, tour operators and wholesalers. Hilton, for example, focuses on the travel agencies and tour operators. They educate the third parties about Hilton Huanying through trained reservation agents, collateral, and invitations to participate in global events, such as the program launch events in San Francisco, Beijing and Shanghai.

For Marriott, the Li Yu is offered to transient bookings and group bookings; transients enjoy all benefits of the program while groups may arrange to enjoy a limited number of deliverables in the program.

Looking back:
The Chinese are not the only ethnic group to encourage hotels to make a company-wide operating procedure. Marriott, Hilton, and Starwood have all offered an initiative concentrating on accommodating Japanese travelers in the 1980s when there was tremendous demand for specific services geared toward this customer base. Aside from programs targeting Japanese travelers, many aimed at women (e.g. Lady Hilton in 1965) and young travelers (e.g. My Little Hilton in 2011) have been introduced.

In essence, hotels offer products and services beyond the scope of the standard in the brand’s origin to make them relevant to the market. What is important to note about the Huanying, Li Yu, and SPT is that those products and services are now traveling abroad with the customers.

Measuring the Impact:
Hilton has seen a tremendous impact from the Huanying program. “Globally, bookings in the first seven months of the 2012 by guests originating in China increased 129 percent at Hilton Huanying participating hotels over the same period in 2011.” says Mr. Andrew Flack, VP of Global Brand Marketing, Hilton Hotels & Resorts. Since launching Hilton Huanying in August 2011, the program has grown from 30 to 70 participating hotels. As of December 2012, enrolled hotels span 23 countries.

Using the room nights booked at participating Hilton Huanying properties by guests of Chinese origin, Hilton identified high demand at a number of hotels spanning many destinations. Some of these hotels and destinations include:

Figure 2. Hilton Hotels that received Exceptional Growth in Demand

  • Hilton Phuket Arcadia Resort & Spa, Hilton Pattaya, Millennium Hilton Bangkok (Thailand)
  • Hilton Tokyo, Hilton Fukuoka Sea Hawk (Japan)
  • Millennium Seoul Hilton (Korea)
  • Hilton Sydney, Hilton Cairns (Australia)
  • Hilton London Metropole, London Hilton on Park Lane (U.K.)
  • Hilton Hawaiian Village® Beach Resort & Spa, Hilton New York, Hilton Los Angeles/San Gabriel (U.S.A.)
  • Hilton Maldives/Iru Fushi Resort & Spa

Marriott doubled the number of Chinese members in their Marriott Rewards program in 2011, which speaks to Chinese travelers trying the Marriott brands and enjoying the experience. Launched recently, it is too soon to study measurable results for the Li Yu program but satisfaction surveys attest that the program is being well-received; Marriott plans to measure Li Yu’s success by market share in the long term.

Starwood received quick results from the metropolitan areas after SPT’s launch. Hotel staff, guests, and sales teams have expressed satisfaction; St. Regis in Monarch Beach is classified among the top hotels benefitting from the implementation of the program.

The Next Step
Hilton is taking a step up by turning its Huanying amenities into more than just added-service to the room; the amenities are becoming commercial products. In August 2012, Hilton announced Huanying’s one-year anniversary with the introduction of a new Hilton exclusive product created by an iconic international fashion designer – Vivienne Tam, a New York City and Hong Kong based fashion designer. Could there be a better match for a designer to be featured at Huanying’s first anniversary? The product she created is quite exciting: limited-edition "Water Dragon" slippers. This is ideal as a light, memorable souvenir as well as a very “practical” accessory.

I can’t wait to see what Marriott or Starwood will do to celebrate their anniversaries! The key to prolonged success will be ensuring the programs are more than just a fad and it will be interesting to view how that will transform (if at all) hotel standards. Will they just become a typical item on the menu? Will there be Chinese speaking staff at motels or independent hotels in certain destinations? Will there be Brazilian and Indian programs?


Congee, a type of rice porridge popular in China, is among the essential breakfast menu items for all three initiatives. (picture: courtesy of Hilton)

Hilton New York is one of the hotels that offer Huanying (picture: courtesy of Hilton)


Dimsum and tea are also popular items for the Chinese travelers (picture: courtesy of Marriott)

Hilton partnered with Designer Vivienne Tam for its Huanying amenities; the photo was taken at the Hilton Huanying first anniversary, featuring the water dragon slippers (picture: courtesy of Hilton)

Sources:

U.S. Department of State's Bureau of Consular Affairs (2012, May), Visit America, It’s Easier than you think [Video file]. Retrieved from http://travel.state.gov/visa/visa_5735.htmlThe White House Office of the Press Secretary, We Cant’s Wait: President Obama Takes Actions to Increase Travel and Tourism in the United States (2012, January 19). Retrieved from http://www.whitehouse.gov/the-press-office/2012/01/19/we-can-t-wait-president-obama-takes-actions-increase-travel-and-tourism-U.S. Department of State’s Office of the Spokesperson (2012, July 12), State Department Processes One Millionth Visa in China for Fiscal Year 2012. Retrieved from http://www.state.gov/r/pa/prs/ps/2012/07/194940.htmHilton Huanying, a website managed by Hilton Hotels & Resorts, http://www3.hilton.com/en/about/huanying/index.htmlMarriott LiYu, a website managed by Marriott International, http://www.marriott-liyu.cn/en/Starwood Personalized Travel, a website managed by Starwood Hotels & Resorts Worldwide, http://www.starwoodhotels.com/promotions/promo_landing.html?category=CNTRLPHilton Hotels & Resorts (2012). Limited-Edition Vivienne Tam Slippers. Retrieved from http://hiltonglobalmediacenter.com/assets/HILT/docs/2012/huanyingslippers/HiltonHuanyingSlipperFactSheet.pdf
Credit
Erin Kim    Erin Kim
Valuation Analyst
HVS Consulting & Valuation

Bio: Erin is a Consulting & Valuation analyst at HVS New York. Since joining HVS, Erin has conducted consulting and appraisal services for hotel owners, lenders and operators throughout the world. If you wish to discuss this article or obtain the back-up data, please contact Erin at Ekim@hvs.com
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