The timing for global hotel chains to expand their presence in China has never been rosier. It's not just the sheer size of the domestic travel market but also the learnings that can be had from a country that has emerged as a technology trailblazer.
Global chains have unleashed a new round of efforts to snare a share of China’s domestic travel market. Hyatt Hotels is the latest to launch a new Chinese hotel brand while Hilton is using neuroscience to see what’s going on in the minds of local guests.
Several reasons for the fresh spurt of interest: China’s domestic travel market has, for far too long, remained in the shadow of China’s outbound travel market. The fact is that the domestic market is far, far bigger, and a government policy to boost domestic consumption looks set to bring about greater growth.
China’s domestic travel market spend is seven times that of its citizens’ overseas travel expenditure. Its tourism ministry said domestic travelers spent over $700 billion last year. Compare that with outbound travel spend in 2018, which China Tourism Academy and Ctrip estimated was over $100 billion in 2018, according to one report.
Revenue potential aside, China is shaping big trends in the use of technology in travel and hospitality. Chains will gain an understanding of how these trends work, be they in marketing, loyalty programs, operations, payments, and more, some of which may even be borrowed for use outside China.
Yet another reason is that domestic travelers are, of course, future outbound travelers. And nothing beats local presence to understand their evolving needs and preferences — and to build brand affinity early on with these guests.
Read the article below on the different strategies Hyatt and Hilton are employing to expand their presence further in China.
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Asia Editor Raini Hamdi [email@example.com] curates the Skift Asia Weekly newsletter. Skift emails the newsletter every Wednesday.
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Photo Credit: Grand Hyatt Shanghai. The global chain is launching a new China hotel brand. Hyatt Hotels