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Chinese brands soldier on despite slower growth

A slowdown in China’s economy is affecting the pace of development for Chinese hotel brands, but the concept remains a strong proposition, according to the creators.

To date, the number of hotels in this niche that are in operation are few and far between. They include an Ahn Luh, which just soft-opened in Shanghai; the first WEI Retreat, 2.5 hours’ drive from Shanghai; one-year-old NUO Hotel Beijing; and three Hualuxe hotels from IHG. Zitan, a new brand created by Edmond Ip, who fashioned the Hualuxe concept when he was with IHG, has yet to sign a hotel.

But proponents of these ‘China-centric’ brands insist it is a question of timing and, although these aren’t the best of times in China, the concept remains even more relevant today than when they debuted in 2012-2013.

“More Chinese travellers are becoming more affluent and prefer to stay in unique hotels in China and abroad,” said Philip Wei, founder of WEI Retreats, adding there will be more such brands and the quality is “ever-increasing.”

A Courtyard Pavilion villa, 140sqm, at Ahn Luh Zhujiajiao, Shanghai
A Courtyard Pavilion villa, 140sqm, at Ahn Luh Zhujiajiao, Shanghai

The hotel market in China is in a transition period, according to Evan Pavlakis, vice president of pre-opening services, Ahn Luh (Beijing) Hotel Management. “From group travel to individual travellers, more and more Chinese people have become very prosperous and as such they seek lifestyle changes,” Pavlakis said. “Brands as such Ahn Luh destination resorts offer them such a lifestyle.”

The common factor that binds these brands is their desire to bring back Oriental elegance and fine Chinese culture and history in a deeper yet contemporary manner – not just window dressing or merely adding services such as Chinese food and language to cater to clients, who include both upmarket Chinese and Western guests.

“The NUO brand reflects a deeper infusion of Chinese culture,” explained Forhad Ullah, managing director of URBANPROJECTS, which designed NUO Hotel Beijing. “The hotel is built around its art collection, the traditional tea ceremony and its specific contextual location – city, mountain, valley, province, etc.

“The style of the interior and exterior is not simply a facsimile of traditional Chinese architecture,” Ullah added. “Materials, proportional systems, art, sculpture, fabrics, and pottery, all contribute to the ambience and personality of each NUO location.”

The hotel also gives back to the community by promoting local arts and crafts, sponsoring local tea plantations and using local natural products, Ullah said.

All-day dining at NUO Hotel Beijing
All-day dining at NUO Hotel Beijing

Ullah believes NUO, which is backed by state-owned Beijing Tourism Group (BTG), will go far, first in China then exported overseas. As well, BTG will use the brand to upgrade its existing portfolio of ageing government hotels throughout China and to put its under-utilized land bank to good use.

“The backing of BTG and its existing portfolio of hotel sites throughout China will allow NUO to expand and establish itself far more rapidly than a traditional commercial brand ever could,” Ullah said. “This is hard for European and North American operators to compete with – there are no shareholders, no immediate requirement for dividends or profit – this is an investment in the future of Chinese hospitality.”

IHG, however, might disagree with Ullah’s perspective. The chain said as of December 2015, it has a pipeline of 21 Hualuxe hotels (6,632 rooms), all in China. “It’s important that this brand works for the market it is developed for before we think about taking it global,” said an IHG spokesperson.

Like NUO, Anh Luh, may also see a more rapid development with BTG as parent, along with two other partners General Hotel Management and Great Ocean Holdings. According to Pavlakis, Ahn Luh is scheduled to open another two properties next year, in Qiandoahu and Lanting in the Zhejiang province, and has several projects already signed or being signed in China in Beijing and the provinces of Sichuan, Yunnan, Jiangsu, Anhui, Fujian, Hubei, Henan, Guangdong, Hainan, Shaanxi and Heilongjiang. Outside China, it is in talks with partners in South Korea and Japan.

But even without big parents like BTG or IHG, Wei, a hotelier who formerly worked with chains such as IHG, Shangri-La and Banyan Hotels & Resorts, said he is expanding. He said the design processes for two Wei projects in New York and the Maldives are underway and he is in discussion for another hotel in Georgia, Tbilisi.

“We can certainly export this brand to destinations (overseas),” Wei said. “We can replicate the concept, service delivery, etc., of our flagship WEI Retreat Tianmu Lake with some adjustments on the local culture and destination. “The main challenge is the perception of Made in China brands as low to mid-tier level. However, we are confident that in the very near future we are able to share with everyone that China is able to produce high-end hospitality brands that are on par with the likes of Four Seasons and Aman,” he said.

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