Small Luxury Hotels of the World LogoChina Traveller

August 2009

 

Q: China expansion plans?

A: We have noticed an increase in the number of hotel applications from China, which is a reflection of the growing maturity of the market and the subsequent proliferation of luxury boutique hotels across the country. SLH added three Chinese hotels to its 2008 global portfolio and we have already welcomed Han’s Royal Garden in Beijing, Pudi Boutique Hotel in Shanghai and Wuzhen Clubhouse in Tongxiang this year. Our first ski resort in China, Sun Mountain Lodge in Shangzhi, is also scheduled to open this year. This growth demonstrates Small Luxury Hotels of the World’s commitment to China and reflects the high standards of boutique accommodation that is developing across the country. Each of these has added to the breadth and depth of Small Luxury Hotels of the World’s offering in China.

 

Q: Occupancy percentage of outbound travelling Chinese staying at SLH abroad?

A: China is an increasingly important source market for SLH. Demand from Chinese travellers visiting SLH hotels in Europe and the Asia Pacific region is particularly high, whilst a growth in bookings for hotels in the Americas is expected in the next year now the destination has opened up to visitors from China. We have actually already seen a number of bookings for our hotels in the US from the China market. Compared to last year, Spain seems to be an increasingly popular destination for Chinese travellers – as does Bali, Australia and New Zealand. Despite the global economic downturn, revenue from bookings made from China has increased this year. Compared to the same period last year bookings from China have grown by 150 per cent in the first six months of 2009.

 

Q: How is brand SLH perceived in the China market?

A: We are seeing a growth in the number of bookings made through the GDS by travel agents in China. We have worked hard to build our relationships with the trade here – for example, through our attendance at trade shows such as Asia Luxury Travel Market (ALTM). Travel agents know that their clients will only experience the very best when they recommend an SLH property – wherever it is in the world. They trust us and they know they can rely on us to take care of their valued clients.

 

Q: What gives SLH the competitive edge?

A: We were recently awarded top honours for the third year running in the New York-based Luxury Institute’s annual Luxury Brand Status Index survey. SLH was voted number one luxury hotel brand by wealthy consumers beating off 21 other luxury hotel brands, including Ritz- Carlton and Peninsula. No brand is better placed than Small Luxury Hotels of the World to provide our guests with the best of the best. The fact that only five percent of the hotels that apply to join are successful is testament to the high standards we demand. Although our hotels have their own interpretation of luxury, they all subscribe to a single standard of excellence.  Although we are keen to grow, we will never compromise on our strict standards – our reputation depends on it. As well as personalised service, it is really the experiences our hotels offer that set us apart as a brand. From medieval sword fighting, moonlit sleigh rides, bob sledding at 80 miles an hour, exploring the Scottish countryside in a Jaguar E-Type Roadster, a one-to-one Thai cooking class to a private shopping spree in Cartier, the range of experiences is extensive. SLH hotels can also organise behind the scenes tours or opportunities to engage with the local community – for example, tea with the Berbers in Morocco, mingling with the Masaai tribes in Kenya or an overnight stay with a nomadic family in Mongolia.

 

Q: Major obstacles in positively branding yourself in China

A: We have not encountered any major obstacles. We are building the profile of our brand amongst consumers, trade and hoteliers. China is a market which is poised to be one of significant growth for SLH – and we are dedicating the resources necessary to fuel this growth.

 

Q: Outbound Chinese traveler’s loyalty to foreign branded hotels?

A: Traditionally Chinese travellers have been extremely loyal to the large, international hotel brands. However, our brand positioning matches exactly what experienced Chinese travellers are beginning to demand – individuality, memorable experiences and as sense of self-identity.  These discerning travellers do not want cookie-cutter hotels.

 

Q: Methods/tactics to generate better awareness in China?

A: We have an integrated approach to Sales, PR and Marketing. We hold a regular media event in Shanghai which is attended by representatives from our hotels around the world. We also have a presence at the top consumer shows such as Millionaire Fair, Extravaganza Fair, China International Luxury Property Fair and events such as the 9 Dragons Hill Polo Event. We have attended ALTM in Shanghai since the first event three years ago. We support a number of charity events across the region, such as annual charity fundraising event for The British Chamber of Commerce in Shanghai, as part our commitment to responsible tourism – an initiative we call ‘Caring Luxury’. We are also participating in various industry initiatives in-market. I am on the judging panel for the inaugural China Best Design Hotels Awards which are being organised by The Bund.

 

SLH appointed travel industry expert Alison Roberts-Brown as Area Director, Asia Pacific in June 2008. Alison is responsible for overseeing business development, sales, PR, marketing partnerships and stakeholder liaison.

China Traveller

April 2009

 

As the global financial crisis deepens in North America and Europe with no end in sight, it is expected that some of the more prudent tourism destinations will be redoubling their promotional activities in markets with the ability to evade the worst of the downturn. The fact that marketing budgets have been decreased in light of the crisis however alludes to the catch 22 situation that many marketers find themselves in. China in particular matches this description with senior tourism officials confident of continued outbound travel growth throughout 2009, yet the strengthening of the Renminbi, coupled with crisis induced slashed budgets, over the past few years has equally resulted in decreased marketing budgets.

 

The unique environment within which we find ourselves has forced marketers in China to raise the bar on creativity, to achieve better results on the back of fewer resources. While few crisis driven tailor made campaigns are immediately recognisable, creative campaigns born out of intensified competitiveness are and should serve as lighthouses in a sea of new strategies.                

 

Celebrity Endorsement: Celebrity endorsement of destinations is becoming an important tool in the overall promotional kit. The increase in celebrity endorsement promotions in the local consumer industry is indicative that such tactics resonate with the Chinese audience. While a standard tactic in general consumer PR in China, with hindsight it is surprising that celebrity endorsements have not featured more in the promotion of destinations. A creative example includes Jamaica’s inclusion of China’s father of rock, Cui Jian, in a recent FAM tour. Furthermore, in 2008 the Canada Tourism Commission included ice skating celebrities Shen Xue and Zhao Hongbo in their promotions, a strategic step that will go a long way in the run-up to the 2010 Vancouver Winter Olympic Games. For her part, Chinese actress/director and at the time world number one blogger Xu Jinglei was invited to South Africa to view and report on the country’s highlights leveraging on her popular online platform. Upon her return Ms. Xu published an English language learning guide filled with pictures of herself set against a South African backdrop and locally relevant dialogues, the book quickly entered the top ten best sellers list in Shanghai.

 

Blockbuster Films & Music Video’s: Mindful of the positive influence the blockbuster hit Lord of the Rings had on New Zealand’s tourism, the Australia Tourism Commission spent in the region of AUD$40 million on the promotion of Australia staring Nicole Kidman and Hugh Jackman. While strategically sound in theory to splash out on such visible promotions, the strategy clearly went astray as the final product did not live up to expectations. From local viewers the author spoke to, it appears that Vicky Cristina Barcelona proved to have a stronger pull factor to Spain than Australia achieved, a frustrating point considering it was probably not one of Woody Allen’s objectives. A number of destinations have lobbied Chinese film makers to shoot on their soil, some with varying yet limited results, but it will be interesting to see which destination manages to host the production of a Chinese blockbuster hit that will have a direct impact on their Chinese travel arrivals. Chinese music video producers are on the same track, seeking new and exciting natural backdrops that will blow their audience away.    

 

Maximising Resources Online: Few would disagree that the Queensland Tourism Authority’s ‘Best Job in the World’ campaign was other than utter genius. With almost 35,000 applicants around the world promoting their video’s amongst their friends resulting in enormous online and off-line buzz, it is difficult to think of a more creative campaign. The campaign has clearly resonated with the Chinese audience with Clare Wang wining the wild card vote with three times the votes of her closest competitor. Destinations would do well to take a feather out of Queensland’s hat and tailor make similar campaigns for the China audience.

 

There are also a number of online consumer PR tactics that have yet to migrate to travel & tourism PR agencies in China. Social networking platforms such as Chinese versions of Facebook employed to promoted consumer products and services, viral games development, and the production and posting of online specific video’s have been developed to great effect in other industries thus far. Most destinations to date have also ignored what is being said about them on local bbs (Bulletin Board System) sites (the infamous Chinese Internet chat rooms) relying merely on traditional media monitoring. Monitoring and positively influencing bbs sites has proven to be both an economical and effective strategy for consumer products as it is difficult to find a more interactive platform in the virtual world we live in. Reacting at the eleventh hour to damaging bbs chatter in a time of crisis is simply no longer an option. 

 

Lastly, a mix of traditional and new tactics are also on the cards. A growing number of countries have already sent influential Mainland bloggers on FAM tours to their countries with great effect. Recently a single Chinese tourism beat blogger on invitation in South Africa posted numerous articles that received over a million hits amongst travel enthusiasts as well as hundreds of positive comments and requests for additional information. Such tactics strike at the heart of the target audience and permit for the necessary interactivity that is an effective builder of emotional bonds with your brand.

 

As the Chinese consumer market advances in maturity destinations and travel organisations will be required to embrace increasingly sophisticated strategies to maintain and/or increase competitive market share. Coupled with China’s unique economic strength the financial crisis has added impetus to the need to rethink strategies in China’s travel & tourism industry.

China Traveller

March 2009

 

With damaging storms, upheaval in Tibet, the Sichuan earthquake and the hosting of the Beijing Olympics, 2008 was expected to be an unassuming year for Chinese outbound travel. Initial figures collected from China’s exit ports however indicate that despite all the herculean challenges met, outbound growth remained surprisingly robust for most regions.

 

With the exception of troubled Thailand, South East Asian countries benefited significantly with overall high growth rates while Europe almost universally suffered under a cloud of downturn pessimism (complete table of figures on data page, pg. 7). Growth rates were also reversed in a number of African and Latin American countries, a serious issue of concern for developing countries reliant on foreign arrivals for job creation.

 

No surprise in that Hong Kong remains the most popular destination with over 17 million Mainland travellers visiting the Special Administrative Region in 2008, closely followed by Macau with over 15 million arrivals. Neighbouring Japan remains the global destination of choice for Chinese travellers receiving 1.55 million persons at a growth rate of 6.8% over 2007. Vietnam was the second largest recipient of Chinese visitors with 1.45 million at a whopping 58% growth over 2007. It is interesting to note the disparity in figures between China and Vietnam as destination itself only recorded 650,000 visitors. The disparity can been explained due to Vietnam sharing a border with China, a consequence of which Chinese figures include local border day trips, with the Chinese persons returning on the same day, whilst Vietnamese figures only include over night stay.   

 

The order of remaining neighbouring countries with the highest Chinese arrivals include: Korea in third place (1.34 million); Singapore surpasses Thailand for fourth place with 713,000 arrivals; Thailand (624,000); Malaysia (623,000); Taiwan replaces Indonesia for seventh place (279,000); Indonesia received 248,000 arrivals on the back of impressive 46% growth over 2007 while the Philippines came in last with 163,000 arrivals on negligible 1.7% growth.

 

Travellers to Australia continued to grow at 3.7% resulting in 413,000 arrivals. Australian tourism figures also reflect lower numbers than China’s (356,400) which is partially explained by China’s numbers including all types of travellers (business, students, relative visits etc.) as opposed to pure tourism figures. New Zealand received 73,000 visitors at a growth of 7.7% over 2007. The United States, taking advantage of its fairly recent ADS (Approved Destination Status) status surged ahead with 775,000 arrivals, 8.5% growth on 2007 figures, while Canada almost reported zero growth resulting in 230,000 visitors.

 

With the exception of Russia (790,000 visitors at 7.2% growth over 2007) Europe performed poorly with Germany recording 253,000 visitors, a decline of 6.9%. The UK received 234,000 visitors (decline of 1.4% over 2007) while arrivals to France declined by 5.9% over 2007 resulting in 202,000 arrivals. The blanket drop in European arrivals has a number of influencing factors. Firstly, the number of natural calamities to hit China in 2008, along with the hosting of the Beijing Olympics, was always going to have the greatest impact on long haul destinations, and with Europe being the greatest recipient of Chinese outbound travel for so many years it was natural that for them to feel the greatest pinch. Canada, another long haul destination, as previously mentioned also reported near zero growth but the United States avoided the same fate due to its stronger business and student exchange relations with China as well as its newly acquired ADS status. Fearing illegal immigration, Europe also raised the bar on visa requirements for Chinese travellers that clearly had a direct relationship on the drop in tourist numbers. Lastly, the now infamous Olympic torch relay spectacle that occurred in Paris, protests in the UK compounded by the German Chancellor meeting with the Dalai Lama in the wake of unrest in Tibet galvanised potential Chinese tourists into an anti-Europe group.   

 

Brazil also received less visitors than in 2007 with a decline of 1.2% resulting in 23,000 visitors but the country to suffer the steepest decline in arrivals according to available information is 2010 FIFA World Cup host South Africa attracting a mere 34,000 Chinese visitors, a decline of 13.5%. In the Middle East the UAE registered robust growth of 19.8% totalling 118,000 visitors.   

 

Comparing the available Chinese figures with the actual destination arrival figures however, it becomes clear yet again the discrepancies that exist due to a number of reasons including the infamous Hong Kong/Macau factor as well as the fact that many Chinese travellers concurrently visit multiple destinations, the second and third stop, or more, of which are not reported at exit ports. Taiwan reported an additional 50,000 arrivals, while Singapore registered over 300,000 more Chinese visitors. Thailand reported an additional 150,000 plus visitors while Turkey and New Zealand reported an impressive 35,000 (more than double the Chinese figures) and 37,000 additional arrivals respectively. As allured to above, Hong Kong in particular and Macau account for much of these discrepancies serving as a hub for transferring flights.