Hilton gains from China's tourism boom with 'the right brand'
03/20/2019|9:38:15 AM|The Drum

China has emerged as the world’s biggest outbound travel market with 145 million Chinese travelling the world in 2017, driven by the country’s rising middle class and the burgeoning wanderlust of millennials. This presents tremendous potential for growth for hospitality brands like Hilton, says Gary Steffen, the global head of Canopy by Hilton.

Canopy by Hilton, which was first launched in 2014, opened in China in early February 2019 in Chengdu City Centre. Today, there are a total of 17 brands in the portfolio. Canopy by Hilton's opening in China marked its first foray into the country and the Asia Pacific.

Before launching the brand in China, Hilton commissioned a study with Kantar that surveyed 1,000 respondents aged between 20 to 45 across China, who have stayed in an upscale hotel at least once. The top line findings revealed that Chinese travelers today, bolstered by higher disposable income, wider international exposure and easier accessibility of travel, are more confident in exploring new destinations and seeking new experiences when they travel.

Commenting on the findings, Steffen says: “What is interesting is that these traits mirror closely those of the global audience that we spoke to when we first conceptualized the brand. It is encouraging for us to know that today’s Chinese travelers demonstrate a strong appetite to dive deep into the local culture and pay a premium for rewarding experiences.

By pinpointing hot zones that consumers were focusing on, Hilton was able to identify qualities that clicked with consumers. Respondents responded positively to the idea of a ‘thoughtfully local’ offering, where the hotel serves as an extension of the neighborhood, offering a taste of the surrounding locale through distinctively local designs, food and drink, partnerships and more.

Hilton is facing competition from unlikely sources in China as local brands like e-commerce giant Alibaba has moved into the hospitality business by opening a smart hotel that uses small robots to deliver room service to hotel guests by finding the correct elevator, floor and room using voice recognition technology, IoT infrastructure and machine learning.

The Mini Program provides guests with access to a series of online services, including their stay invoices, a property guide and travel information to help them explore the local destination. Hilton’s rewards program, Hilton Honours, is hosted separately on a specially-launched Mandarin language Hilton Honors app.

Hilton has also formed several partnerships with local providers of payment solutions to cater to the mobile consumption habits of Chinese travelers, where 96% of Chinese consumers were found to have used a mobile payment app over a six-month period in 2018. More than half of the people are using apps such as WeChat Pay or Alipay, daily.

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