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Jun
2015

Luxury hotels September 2013

With the maturing of the domestic consumer, quality of life has become the pursuit of many wealthy people. In early September this year, the news of Kai-fu Lee who is the former Microsoft Vice President and Google Global Vice President and Greater China President had been diagnosed with cancer evoked many successful people to focus on their own health. The general media, TV and newspapers have been advising of the risks to individuals that living an excessive life in pursuit of success is not healthy and to slow down and enjoy themselves.

Tourism is the most popular way and for some may be the only way to relax, according to Chinese consumers. The ‘Tourism Act’ which we mentioned in the last LIC, to some extent, will regulate the related industries and help them develop and grow.

With increased spending power, Chinese consumers are more likely to travel abroad, their reason for travel having also changed, from shopping excursions to leisure-based trips. According to the latest report by Hotel.com, 40 percent of Chinese tourists who travel abroad choose luxury hotels (visitors over 35 accounted for 41% and under 35 accounted for 36%). The spending power of Chinese tourists has also surprised the major international hotels, many of which have increased their investment and expansion quickly in China. Other than the boutique hotels introduced in the March 2012 issue of LIC, a number of luxury brands currently established in China have become involved in China’s hotel industry, and want a share of the market.

Luxury hotels

In the end of 2011, the Join•In Group together with Tonino Lamborghini hotel group, successfully introduced the Lamborghini hotel concept to the China market. The Join•In Group chose the “wholly-owned and full right to use the brand” approach, which is China’s first joint-venture to follow this model in the hotel industry.

Lamborghini hotels in China will be divided into three different formats: vacation, business and boutique. In October, after existing hotels in Suzhou (Boutique) and Kunshan (Business), the third Lamborghini hotel (Resort) will open in Huangshi, Hubei Province.

The pricing strategy for each format differs; the Suzhou boutique hotel has a rack rate of about 3,000 RMB per night, while the Kunshan business Hotel will be around 1,000 RMB per night.

New comers

Since the arrival of Lamborghini, we have started to see other brands announce entry into the hotel sector as a means of diversification and monetisation of an established brand name.

Bvlgari

In March 2013, the luxury jewellery brand group Bvlgari announced its first Bvlgari hotel in China that will open in 2015 in Shanghai. Apparently in 2005 when the CEO, Francesco Tranpani was visiting Shanghai, it was decided to introduce a Bvlgari hotel to the city. After seven years of planning, the brand is finally setting out on an important strategic initiative.

Ferragamo

In June 2013, Valeriano Antonioli, CEO of the Ferragamo hotel Group, claimed that in 2012 the Chinese accounted for 5% of all the guests staying with the brand which had strengthened the confidence of the group to enter China. Ferragamo plans to open independent operating high-end hotels in Beijing or Shanghai, but as yet have no specific time or location.

In order to kick start the market, Ferragamo started to cooperate with Ctrip, Agoda and other well-known online hotel booking websites to attract Chinese guests overseas, in addition to launching a Chinese version of its official website at the end of June.

Versace

Sociedade de Jogos de Macau S.A. (“SJM”) and Gianni Versace Company announced in September a bilateral cooperation to build and operate the ‘Versace Palace’ hotel that will open in 2017. Designed by Versace and managed by SJM, the hotel will include approximately 270 rooms, a spa centre, indoor and outdoor swimming pools, restaurants and retail stores.

Luxury hotel openings

Ritz-Carlton

On 25th August, Simon Cooper, the President and Managing Director of Marriott International Asia Pacific, announced that a new Ritz-Carlton hotel will open in Hainan in 2016.

Chengdu Ritz-Carlton hotel is ready and will open on October 9th, and the Ritz-Carlton Tianjin will open in 18th October.

St.Regis

Chengdu St.Regis hotel will open in January of 2014, its recruitment fair was held in July this year.

Waldorf

China’s second Waldorf Astoria Hotel, the Beijing Waldorf Astoria Hotel will open in 2014. The hotel now has begun to enter the recruitment period, and no specific opening date has yet been given.

29th March, The Hilton Group announced the planned opening of the third Waldorf Astoria Hotel in China in Chengdu in 2016

Shangri-La Hotel

The Shenyang Shangri-La Hotel opened on 15th August, and from 15th September the Shangri-La Hotel in Zhongshan no longer belongs to the group having been sold to a new owner. It will be renamed accordingly.

Banyan Tree Hotels & Resorts

19th June, Banyan Tree formally signed with Jiulin Golf Villas and will open a resort hotel in 2015 in Tianjin, and on 26th July, Chongqing Banyan Tree hotel opened.


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