Question

Wall Street Journal

- July 11, 2011

By

ALEXANDRA BERZON

"Red Carpet for the Chinese - Hotels Add Menu Items, Translators, Other Services for

Growing Travel Segment"

The traditional Chinese rice porridge, called congee, will soon become a staple of hotel

breakfast buffets in America and abroad as U.S.-based hotel chains compete for

growing numbers of Chinese travelers.

The Chinese dish is part of a set of broader initiatives to attract Chinese travelers at

hotel giants Hilton Worldwide Inc. and

Starwood Hotels & Resorts Worldwide

. This summer, both hotel companies are rolling out hospitality standards centered on items

that cater to Chinese guests in hotels across the world

Congee breakfast is among the Chinese-style

amenities at the Hilton in San Francisco's

financial district.

Starwood plans to announce a program

Monday called "Starwood Personalized

Travel," which will require the company's

1,051 hotels—including the Sheraton, Westin

and W chains—to offer a set of specific

services for Chinese travelers, including in-room tea kettles, slippers and translation

services, in addition to new menu items.

The program will start at 19 hotels in cities such as New York, London, Mexico City,

Seoul and San Francisco, where Chinese business is rapidly growing. The program will

cover all Starwood hotels by the end of next year, the company said.

Hilton on Monday plans to announce a program for its Hilton Hotels & Resorts brand

called "Hilton Huanying"—from the Chinese word for "welcome." Hilton hotels can opt

into the program. Those that do—30 so far—must provide a front desk worker fluent in

Mandarin and a Chinese television station, as well as a full Chinese breakfast including

dim sum, congee and fried dough fritters, among other items. It will begin in August.

"Chinese travel is going to provide one of the great opportunities that we'll ever see in

the business," said Hilton Chief Executive Chris Nassetta.

Marriott International

Inc., meanwhile, is planning a new Chinese breakfast program in

the U.S. this fall that will include information for hotels on how to create a Chinese

breakfast.

Chinese foreign travel is still a small segment of overall global travel. But these moves

by hotel companies signal the growing importance that Chinese travelers are expected

to have in the coming years for the travel industry. They reflect both the leap in China's

economy and the loosening of restrictions on travel since as recently as a decade ago,

when Chinese were not allowed by their government to visit most countries.

"Outbound travel from Chinese is the next wave," said Starwood CEO

Frits van

Paasschen

.

The changes in part follow a script from the 1980s. As Japan's economy boomed, hotels

in many cities in the U.S. and around the world added Japanese breakfast items such

as rice, dried seaweed, pickled vegetables and miso soup to their menus.

The Starwood and Hilton Chinese programs are more formal and reach across their

portfolio of hotels. Attracting the new travelers is also urgent priority as growth in travel

dollars from many markets softens.

Global hotel brands have seen significant pick-up this year following deep declines

during the downturn. However the boost has been far greater in Asia than other regions,

reflecting in large part the growth of travel among Chinese.

In the first quarter of 2011, for example, Marriott saw revenue per available room in Asia

increase 17.2% compared to 5.8% in North America.

According to the U.S. Travel Association, 802,000 mainland Chinese residents visited

the U.S. in 2010, a 53% increase over the prior year. In 2005 just 270,000 Chinese

people visited the U.S. The Department of Commerce expects those numbers to reach

994,000 in 2011. The U.S. received $5 billion from Chinese visitors, according to the

Association, a 40% increase over 2009.

Japanese visitation in 2010 was much larger—around 3.1 million. Yet the trends are

divergent. From 2006 through 2009 travel from Japan declined each year, finally in

2009 reaching the lowest point since 1988, according to the Travel Association.

After Starwood executives noticed an enormous recent jump in the number of Chinese

subscribing to Starwood's loyalty program, a team led by Matt Gaghen, Starwood's vice

president of brand management, spent the last year researching the Chinese market

and discovered that language and food were two of the most important issues for

Chinese travelers.

As such, all Starwood hotels are to beginning efforts to hire at least one person on staff

who speaks a Chinese language. Chinese guests will receive a note from the general

manager translated into Chinese that offers the amenities available to them, such as tea

kettles, razors, toothbrushes and combs.

Since Starwood generally doesn't own hotels but sets standards for them, the changes

could mean a cost increase for hotel owners in some places that don't yet see many

Chinese travelers.

"We're planning and investing in this to get ahead and to appeal to Chinese at the

outset," Mr. Gaghen said.

Questions

25 possible points, 5 points per question.

1.

What services are hotel chains adding to cater to Chinese travelers? Identify 2-3

services that you can think of that are not mentioned in the article.

2.

What types of marketing research would you recommend to hotel chains to better

understand the services that Chinese travelers will want and expect?

3.

Besides hotels, what other firms could benefit from the increase in Chinese

travelers, and how should they tailor their services for this market?

4.

If your future employer is a firm that targets Chinese consumers, what skills and

experience will you need to contribute to your employer's efforts?

5.

Which aspect(s) of the business environment (economic, technological,

sociocultural, political/legal) are being affected the most in this article? Provide

specific examples.

Answer 1

1. What services are hotel chains adding to cater to Chinese travelers? Identify 2-3 services that you can think of that are not mentioned in the article.

New services hotels chains have been adding to cater to Chinese travelers, mentioned in the article, "Red Carpet for the Chinese - Hotels Add Menu Items, Translators, Other Services for Growing Travel Segment," are to offer traditional Chinese dishes for breakfast, such as congee, dim sum, and fried dough fritters. Other amenities being added to attract Chinese travelers are in-room tea kettles, slippers, and a Chinese television station. Also, hotels have been making greater efforts to have at least one person on working on the hotel staff who is fluent in Mandarin to welcome the Chinese guests, provide translations for them, and cater to any of their other needs (Berzon).

There are also a few other services that hotels could offer to help accommodate Chinese travelers. One that I can think of is to give a gift to the visitors from China. Chinese people are very big on good manners. Being polite and humble when welcoming a Chinese guest is very important, rather than being a stereotypical loud obnoxious American. So, a simple little gift to make them feel welcome could really make a big difference in their perception of the hotel. For instance, if someone is on a trip for business, the hotel could place bamboo flowers in the room, which symbolize growth and prosperity, to wish the best with conducting business (The Lucky Bamboo). Another small perk that might help cater to Chinese travelers would be providing them with Chinese to English dictionaries in their rooms could really help them out, especially if it their first time in the US. One more aspect hotels can offer to cater to their Chinese travelers is more calming interior designs in their rooms. Certainly do not put the travelers in a room with an obnoxious feel to it with loud overbearing colors. The rooms do not need to have a coy pond in the middle of them or anything like that, but just a simple calming feel; maybe put some Chinese incense in the room.

2. What types of marketing research would you recommend to hotel chains to better understand the services that Chinese travelers will want and expect?

Doing proper marketing research is extremely important when trying to target a certain group of people. This importance is even more emphasized when you are dealing a group such as the Chinese, which puts so much emphasis on culture, proper behavior, superstitions and can be offended very easily. What would really help hotel chains is conducting research actually in China and possibly set up a department out there. This would allow them to check out popular hotels in China, probably in a large city like Beijing, and study how they go about their business and take care of their guests. This would give American hotel chains a good sense of how Chinese travelers are used to being accommodated by a hotel. If the hotel chain visits China, they will also be able to keep up with current issues and popular trends going on so they can stay up to date with when communicating with their Chinese guests in the US. The hotel chain could also try to take surveys or questionnaires of focus groups in China on what they would like to have in a hotel in the US, or how they would improve the hotel if they had already been to one.

There are then many ways the hotel could go about applying this knowledge to the hotels. Instead of giving Chinese recipes to everyday cooks who do not have much experience with the cuisine, hire professional cooks who extensive experience and specialize in cooking authentic Chinese cuisine. This way the hotel will not run the risk of potentially offending Chinese travelers with poorly made Chinese dishes. Also, teach all the employees with the hotel chain just basic proper Chinese etiquette. This way the doorman won’t accidentally offend a guest on accident, who for all you could know is the CEO of a major Chinese corporation. You could perhaps have a company specialist who goes around to the hotels teaching the employees these little things and checking up on the hotels to make sure everything is going smoothly.

3. Besides hotels, what other firms could benefit from the increase in Chinese travelers, and how should they tailor their services for this market?

There are many other businesses that could benefit from an increase in Chinese travelers, tourists in particular. Any business in or around the airport or around the major hotels could benefit. Chinese tourists tend travel in large groups, and are notorious for being big spenders. “Chinese visitors spend about $6,000 each on every visit here” (Clifford). There are many of these same luxury stores in China but because of China’s ridiculous taxes, luxury items are about 3 times more expensive than they are in the US (Clifford).

These businesses could do many things to make them stick out to Chinese travelers. Just as the hotels are beginning to do, the surrounding businesses could employ at least one person who is fluent in Chinese. “Tiffany, which made almost a quarter of its United States revenue last year from foreign tourists, has added Mandarin-speaking sales staff to its major stores” (Clifford). Travel Agencies could offer brochures in Chinese. Restaurants could offer menus in Chinese. Souvenir/travel shops at the airports could also offer travel guides in Chinese that feature local attractions and activities that Chinese travelers might be fond of. Also, some companies, such as sightseeing tours and translators, could place more advertisements partially in Chinese in the airports and around the major hotels or attractions/hot spots.

4. If your future employer is a firm that targets Chinese consumers, what skills and experience will you need to contribute to your employer's efforts?

If my future employer was targeting Chinese consumers, I would need to have a versatile set of skills and knowledge in order to successfully attribute to my employer’s efforts. First of which, I would need to have general people skills and a good knowledge about marketing in general and international marketing. I would have to know how to sell products or services, regardless of what they are or whom they are for. So, having some experience in a marketing field or international studies would definitely help.

Of course, having a good knowledge of the Chinese culture and being fluent in Chinese, either Mandarin or Cantonese or both, would probably be the most important asset when targeting Chinese consumers. In China manners are just about important as business, so knowing how to act properly without offending anyone is vital. First impressions are key in the business world. So, having spent time in China would be a big plus; the longer the better. This would allow me to study and analyze the culture. I would learn the customs people follow in everyday life and while conducting business. I would learn how what they specifically look for when making purchases. Getting into the minds of the consumer is the name of the game when it comes to selling a product or service.

5. Which aspect(s) of the business environment (economic, technological, socio cultural, political/legal) are being affected the most in this article? Provide specific examples.

The aspects of the business environment being affected the most in this article are the economic and the sociocultural. The number of Chinese travelers visiting the US is growing rapidly each year. “A record number of Chinese visited the United States last year — nearly 1.1 million — and the country accounts for one of the top-growing tourist groups here…the number of visitors is expected to almost double by 2014” (Clifford). This increase in travelers leads to increasing revenue for both US and Chinese airlines and hotels which benefits both economies. Also, the increasing number of big spending travelers creates an increase of money spent on US goods, which is always a good thing for the economy. In 2010, “the U.S. received $5 billion from Chinese visitors, according to the Association, a 40% increase over 2009” (Berzon).

The increasing number of Chinese travelers not only means there are more tourists coming to the US, but also more businessmen. This is a good sign that US companies are creating better communication and opportunities with Chinese businesses. And since China is the country with the fastest growing economy, these interactions are a good thing for the future of the United States’ economy.

All these Chinese travelers have also been causing a drastic change in the hotel socioculture. It affects the way some of the employees behave, as some would learn Chinese etiquette and some speak Mandarin. The demand for certain services would also change since hotels would be providing Chinese dishes and new amenities to cater to these Chinese travelers.

With so many travelers spending such big money on US merchandise and bringing them back to China, the Chinese socioculture may even be affected a little. With all of these foreign products making their way to China, new trends might emerge which could affect the products Chinese companies start to produce. Also, with more companies trying to attract Chinese travelers, the more they will work to accommodate them. This might lead them to produce more Chinese-influenced products, which might actually change the socioculture here in the US.

The aspects of the business environment I feel are being affected the least are the technological and political/legal aspects. I do not think that hotels or other businesses catering to Chinese guests would affect any laws or regulations. The only way I could see any affect on politics would be if a powerful political figure came to the US on business. The hotels and other businesses could make an impression on how America is, or depending on their service, they could affect the Chinaman’s mood/attitude. Although, maybe travelers from other countries besides China could complain that the businesses are unfairly being bias, or favorable, towards Chinese travelers over others. However, I do not think that would be a viable case.

I also don’t think the technological aspect of business would be affected all that much either. The hotels and other businesses might add new technological aspects as a ways of catering to Chinese travelers. However, I don’t see how businesses catering to Chinese travelers would lead to the creation of any new technological innovations that would have an influence on the business environment.

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