Recovery from the COVID-19 crisis may seem a long way off, especially for those in the travel and hospitality industries. But in China, it’s already a reality, with hotel occupancy returning to normal levels and revenue at some properties even surpassing last year’s. At the recent Beijing Culture and Tourism Global Online Strategic Forum, speakers from the hotel industry shared their experiences, recovery strategies and biggest lessons from a challenging year.
Sienna Parulis-Cook is associate director of communications at Dragon Trail Interactive in London.
By June, 80% of Marriott International’s hotels in China were breaking even financially, and the group reached over 70% occupancy in August, according to Becky Cao, the company’s vice president of global sales in Greater China. Strong recoveries have been made throughout the country, she said, from Hainan island in the south, to Chengdu in the west, Hangzhou in the east, and even Wuhan, the center of China’s COVID-19 outbreak.
Elton Sun, vice president of Hyatt China, and CEO and managing director of joint venture Yusu Hotel Management Co. Ltd., said that hotel properties in China are reporting revenue “close to or maybe over the budget, compare[d] with last year.”
“In all my career of 25 years with Hyatt, I’ve never seen such a comeback,” said Till Martin, general manager at Hyatt Regency Beijing Wangjing. “The Chinese consumer has trust, and that’s a great sign. We all worked very hard for it.”
Safety first
The first part of establishing trust and creating the basis for recovery was an evaluation and ramping up of hygiene and safety procedures, agreed the hoteliers at the forum. “Since day one, we invested and looked and took a lot of initiatives on hygiene and wellbeing, be it food safety, be it on how do we deliver, and how do we take care internally as well as externally,” said Martin.
Marriott launched its Global Cleanliness Council in April. Accor has its “All Safe” program, and properties in China have worked with local governments to make sure local as well as global standards, said Ken Wong, Accor’s vice president of sales and distribution Greater China.
From staycations to meetings
One major question for the global travel industry is whether business or leisure travel will return first. For hotels in China, the starting point was local leisure travel, but business travel has recovered alongside, and next on the horizon is the return of MICE.
“I think the key thing that we have learned throughout the journey is to be very consumer centric,” said Wong. As soon as lockdowns began to ease in China in the early spring, consumers were starting to think about leisure travel. Accor’s first move was to introduce “in-city staycation packages,” allowing people to enjoy a change of scenery by spending a weekend in a hotel.
“Later on, consumers started telling us that [they were] ready to travel, but only for a short getaway. So we then worked with many of our business partners who put together short getaway trips,” Wong said. “We knew then, consumers were not ready yet to fly, but they were ready to travel to a nearby city.” Accor also partnered with a number of leading OTAs in China, and launched a new loyalty program together with domestic sales promotions. Next, Accor reached out to its corporate accounts to start bringing back business travel.
Marriott has followed consumer sentiment in its strategies for marketing and product development this year, and lagging recovery in most destination markets outside of China has created opportunities to provide alternatives to outbound travel.
“On Hainan island, we tailor-made weddings for those couples unable to travel abroad. They still can enjoy the same beach and sunshine,” offered Cao as one example. Marriott has encouraged domestic travel through a campaign centered on experiences, and it also holds a members’ promotion on the eighth of each month.
Cao said that both leisure and business travel have made a comeback, and she expects meetings, events, and conferences “coming up very, very soon.” Looking to the last quarter of 2020, she noted that larger-scale groups are returning to Marriott properties in China. Marriott Greater China is now working closely with international organizations to ensure that meetings and other events can be held safely.
Accor’s experience is similar, with Wong reporting that hotels in Beijing are now receiving significant inquiries about meetings, and even providing accommodation for visitors to the Beijing International Automotive Exhibition 2020 from the end of September.
Impetus for change
While recovery is in sight or has even already arrived in China, Hyatt’s Sun stressed that the crisis hit the hotel sector hard and put major pressure on the industry. “The virus is bringing a lot of time to let us polish up the product,” he said, explaining that hoteliers are thinking of new ways to innovate their business and operation models, improve service and start using new digital tools.
He said he believes the crisis has forced hotels in China to analyze the efficiency of their operations, particularly in terms of cost control. Sun sees this as an opportunity for the hospitality industry to move past ingrained and traditional ways of thinking and operating, pushing hoteliers to embrace new channels and digital tools, including self-check-in and e-commerce through live streaming.
Another outcome Sun expects is that hotels in China may be more likely to join groups or chains after experiencing the COVID-19 crisis and seeing the benefits of the resources and support provided by being part of a hotel group. As it stands now, he said, only 20% to 30% of Chinese hotels are managed by a hotel group, compared with nearly 80% in the US.
Optimistic outlook
The prevailing sentiment in the 22-23 September forum, from hotels and others in China’s tourism sector, was optimism. “We’re very optimistic about the travel industry, particularly in the near-term about domestic travel,” Accor’s Wong said. “But if and when the international market is ready, rest assured the Chinese tourism industry will open our arms and welcome the international travelers.”
For those outside China, the situation there offers a positive glimpse into the future, and a roadmap for how travel could return.