2023-11-28
What drives a brand’s success in the ever-evolving hospitality industry? How can brands reshape their value to appeal to new consumer demographics? Join us in this industry dialogue to explore the perspectives of our guests.
Moderator: CHEN Qian, Vice President and Secretary-General of Zhejiang Hotel Association
Panelists:
LI Feng, Deputy General Manager of Guangzhou Lingnan Group Holdings Company Limited, President of China Tourist Hotel Association
Kent SUN, Chief Development Officer of IHG Greater China
HE Zhuanglong, President of Shandong Tourist Hotel Association
XIA Li, Managing Director of Shanghai Jin Jiang J Hotel Management Co., Ltd.
LI Chengyong, President of Nanjing Jinling Hotel Management Co., Ltd.
QIU Jun, Vice President of Huatian Hotel Group Co., Ltd.
Dialogue Transcript:
Moderator: With evolving customer demands, how can the hospitality industry reshape its brand value by creating unique guest experiences?
LI Feng: Enhancing brand value through guest experience is key to enhancing our core competitiveness. The biggest factor in changing customer demands is the development of digitalization and intelligence, which brings various changes along with consumer habits.
Firstly, integration is crucial. We’re focusing on expanding our hotel and destination offerings, breaking new ground in cross-industry collaboration.
Second is cuisine. In the development of hotels in China, cuisine is a vital element in choosing destinations. As scene of consumption replace scenery spot in the new wave of tourism development, destination consumption requires the combination and shared experiences of cities, bringing more urban life and variety through cuisine.
Thirdly, technology is essential in creating unique experiences. By 2030, we anticipate that 80% of services will be automated. This includes everything from operational efficiency to precise customer need analysis and service personalization. By combining cuisine, technology, and integration, we can create distinctive guest experiences that redefine our brand value.
Kent SUN: Analyzing our industry through Maslow’s hierarchy of needs, we start with physiological needs, ensuring guests have quality sleep and bathing facilities. Next are safety needs, covering everything from hotel security to food safety and data protection. Social needs come third, as guests often seek social interaction during their stay. Esteem needs follow, where guests feel valued and respected. Lastly, self-actualization needs are met by providing platforms for guests to express and fulfill themselves, often in settings like important events or banquets. Not every hotel or brand will meet all these needs, but those that do, especially at the five-star level, aim to provide a comprehensive experience that encompasses self-actualization.
HE Zhuanglong: “Rebranding” is all about injecting new life and meaning into our offerings. “Integrity and Innovation” are key to maximizing brand value. “Integrity” involves upholding the time-honored traditions of our industry. To innovate effectively, we must embrace change while staying true to our core values.
Brand value has two dimensions: the external brand and the deeper value it represents, which is about maximizing both hotel efficiency and guest satisfaction. Despite changes in the industry, the essence of hospitality – providing a comfortable, experiential, and warm environment – remains unchanged.
XIA Li: Quality is our first priority, evident right from the design phase. Take, for example, the J Hotel Shanghai Center, designed by the American firm BLD, where every aspect of the room’s design reflects our commitment to quality. Service is our second pillar, exemplified by our comprehensive butler service, which covers everything from airport pickups to in-room services, media promotion and digital marketing. Lastly, emotion is key. If Chinese hotel brands are to be reshaped, especially in the luxury segment, they need to focus on quality, service, and emotional connection.
LI Chengyong: China’s service industry is undergoing a disruptive revolution, particularly in hotel or service branding. There’s a fundamental difference between trademarks and brands. Most hotel services focus on trademarks, paying insufficient attention to the key aspects: brand building, operation, and service value. To understand hotel branding, we must focus on “three fundamentals”: base, essence, and heart.
From the base perspective, brands must focus on the business model to understand the pursuit of building luxury hotels, be it for social, brand, or commercial value. Post-launch, we must consider what kind of platform it will provide for investors, the market, and the management team, and whether it is stable or constantly changing.
From the essence perspective, hotels must address core elements of guests’ needs for food, accommodation, travel, shopping, and entertainment, focusing on brand differentiation. In brand standard management, there are national, industry, and corporate standards. Corporate standards, in brand development, mean differentiation, especially in investment, operation, and expansion. In this era of digitalization, platformization, personalization, and diverse media communication, the essence of brand operation should focus on the market experience, customer experience, and investor experience brought by the brand.
From the heart perspective, it’s all about culture. Brand culture is crucial, and brand management, upgrading, and continuity need to deeply integrate into products, customer experience, and transformation.
By valuing these “three fundamentals”, we can understand where to go with future development efforts, what changes, and what remains constant.
QIU Jun: Brand value has two dimensions. The first is enhancing brand value through creating experiences or innovative scenarios. For instance, Huatian Hotel Group set up a helipad at its headquarters, offering high-end service experience like Mercedes-Benz and Rolls-Royce transfers to the lobby on a red carpet. In Changsha, ranked seventh nationwide in consumer index and high-speed rail traffic, Huatian Hotel Group launched unique experiences like social media-friendly photo spots during the National Day holiday to help Changsha become a trending city. The second dimension is creating brand value. The “four-horse carriage” of product operation, brand operation, asset operation, and capital operation must advance together. In the current intense hotel industry competition, and with rising labor costs in CBI and labor-intensive industries, whether state-owned or private listed companies, only by advancing these four aspects together can survival and development be ensured.
Moderator: The hospitality industry has navigated through internationalization and branding. What are your reflections and practices regarding balancing the international and local values of your brand?
LI Feng: The hotel industry has gone through two phases. The first is “coming to China”. After China was opened up, various international brands have entered China and flourished. Meanwhile, national brands have developed significantly over 40 years, keeping pace with international standards. In this process, individual hotels and national brands have become important carriers of quality life. The second phase is “going global“. For national brands, the core issue in going global is establishing the brand overseas, creating brand standards, cultural experiences, and brand elements among foreign consumers. Whether national or international brands, the integration of international values and authentic local experiences is achievable. As a brand, there’s no domestic or international distinction; it’s about serving global tourists.
Moderator: Could you share your perspective on the integration of international and local elements within hospitality brands?
Kent SUN: Since InterContinental Hotels arrived in China in 1984, we’ve never touted ourselves as an international hotel group. Instead, we’re recognized as the most localized international hotel group, with the motto “In China, For China”. With a reduction of international guests, both international and local brands face a predominantly local clientele. We return to the guest-centric approach, focusing on the Five Senses: first, visual – the aesthetic appeal of the hotel’s products and brand; second, taste – the quality of food; third, hearing – the presence of birdsong, soundproofing, noise levels, background music; fourth, smell – the use of fragrances; fifth, touch – the feel of cotton products and overall tactile experience; and the highest realm, perception – transcending to a sixth sense, achieving unity of body and mind, and a return to nature.
Moderator: Could you discuss “Hospitable Shandong” approach to internationalization and localization in branding?
HE Zhuanglong: Brand value is a collection of human wisdom and a crystallization of time. As time progresses, the boundaries between Chinese brands’ internationalization and localization have blurred. International brands need to integrate with Chinese national brands to form new brand values. The core of brands has fundamentally changed. For successful integration, at least three adaptations are necessary: first, adapting to the new pattern of economic development. As the world and Chinese economies undergo fundamental changes, hotels, as an important part of the economy, must adapt to the new status quo, or their brands will be baseless. Second, adapting to the demands of social and cultural development. Shandong, the birthplace of hospitality culture, showcases the charm of hospitality, whether through international or national brands. Third, adapting to people’s aspirations for a better life. What is international is global, and so is what is national; both must meet and satisfy consumer needs.
XIA Li: Internationalization and localization can be defined separately but must be inclusive. From the J brand perspective, brand positioning and image design should meet global standards and include Chinese culture. Based in Shanghai, Jinjiang must feature Shanghai-style characteristics and reflect corporate values and spirit. Finally, we must reflect our corporate values and spirit. Looking at the 30-plus-year journey of China’s hotel industry from growth to maturity and success, internationalization and localization are two sides of the same coin. Every brand, whether InterContinental, Marriott, or a national brand, is a unique ‘flower’ in the global hospitality garden.
LI Chengyong: Internationalization and localization are like the vertical and horizontal axes of a product, complementing each other. China’s hotel industry needs to learn from advanced international enterprises in corporate, product, and capital structures, and innovation methods. We need to focus on four aspects: first, emphasizing trendiness by merging high-quality cultural genes to create a new aesthetic. Second, focusing on marketability since market demand directs product development, driving profit and continuous innovation. Third, maintaining cultural confidence. It’s vital for products to have their unique features, but confidence doesn’t mean arrogance. It’s about limiting brands within specific boundaries to form vibrant living circles and experience spaces. Fourth, emphasizing cultural integration, which ensures development direction in line with the trends and currents of China’s modern market.
QIU Jun: We must acknowledge two facts. First, there’s a historical gap: international brands have over a century of history, while Chinese national brands have only a few decades, especially those in chain development, which are less than 30 years old. Second, there’s a gap in brand influence. Competitors spur progress, but more importantly, deep integration between international and local brands promotes mutual advancement. In this competitive landscape, I propose these thoughts: first, national brands should root in products, soul in brands, and base in talent, making a good use of foresight and cultural roots; second, leveraging advantages in the industry chain. Huatian’s existing Huatian Decoration Design Institute, Huatian Architectural Design Institute, Huatian Education Institute, and tourism funds aim to help business owners profit in light-asset development, reducing costs along the industry chain to achieve a competitive advantage.