Luxury hotels increase presence in China’s second-tier cities
Global luxury hotel chains are expanding their presence in China’s second-tier cities, as more well-heeled Chinese splurge on accommodation as the world’s second largest economy upgrades to a consumption-driven model.
The Ritz-Carlton opened a 277-room property on Friday at the center of industrial metropolis Tianjin’s colonial quarter. A Ritz-Carlton hotel was also launched in southwest China’s hub city Chengdu last week.
The luxury chain plans to double the number of properties in the country to 16 hotels in three years, said Ainslie Cheung, regional director of public relations at Ritz-Carlton Asia-Pacific.
Langham Hotels International will also add six properties to its China collection mostly in second-tier cities in the next three years, said Brett Butcher, CEO of the hotel division of Great Eagle Holdings, which owns Langham.
Luxury hotels’ rapid expansion, however, coincides with a frugality campaign launched by China’s leadership that aims at preventing officials from spending public money on extravagant trips and meetings. High-end hotels have reported declining occupancy rates since the campaign started at the end of last year.
Ritz Carlton’s hotels in China have a small share of government business so they have not been as severely impacted as other brands, said Michelle Caporicci, regional vice president at Ritz-Carlton Asia Pacific.
With a 435-square-meter presidential suite and an elevator carrying Rolls-Royce cars directly to ballrooms, Ritz-Carlton Tianjin is expected to vie with nearby St. Regis for high-end customers.
However, making sure recruiting enough people to provide a high level of service is a challenge luxury hotels must resolve as they penetrate into China’s second-tier cities that still lack quality practices of service industries, said He Jianmin, a professor at the department of tourism management, Shanghai University of Finance and Economics.
“We flew about 90 experienced members of staff from across the globe to Tianjin and trainers provided training to on-site ladies and gentlemen before they met the first guest,” Caporicci said.
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