In conversation with IHG: Creating travel experiences for the Chinese consumer

N CELEBRATION OF THE 50TH ANNIVERSARY OF UK-CHINA AMBASSADORIAL RELATIONS, FOCUS SPEAKS TO BRITISH COMPANIES THAT HAVE EXPERIENCED SUCCESS IN THE CHINESE MARKET OVER THE LAST HALF A CENTURY

In this fifth instalment of our interview series, Daniel Aylmer, Managing Director of IHG Greater China, tells FOCUS about China’s post-Covid travel rebound and how they are adapting their strategy for first-tier cities, second-tier cities and beyond.

Tell us how and when IHG entered the China market …

IHG was one of the first international hotel companies to enter the Mainland China market with the Holiday Inn Lido Beijing opening in 1984; and the Greater China market with the Holiday Inn Golden Mile opening in 1975.

As an “in China for China” business, the company has been deeply rooted in Greater China for 48 years, and now Greater China has become our second home market and growth engine worldwide.

We are committed to the China market with our purpose of True Hospitality for Good. In 2023 and beyond, we will focus on building our brands, putting our guests and owners at the heart of everything we do, creating a digital advantage and ensuring we have a positive impact on our people, the planet and the communities around us.

What major successes and growth have you had during this time?

As of the 2022 fiscal year, IHG has built a strong domestic business with 639 open hotels and another 471 in the pipeline, with a system size of over 166,467 rooms. We have accumulated in-depth local insights, built hotel brands beloved by guests and provided outstanding returns on investment for owners and shareholders. To date, 12 brands have entered the China market, and IHG’s footprint has reached more than 200 cities.

Remarkable achievements in 2022:

• We welcomed the 600th open hotel and 200th franchise hotel in the Greater China market
• HUALUXE Hotels & Resorts, the world’s first-ever premium hotel brand designed specifically for the Chinese consumer, celebrated its 10th anniversary in 2022. We also announced a comprehensive upgrade of HUALUXE in November 2022, from hotel design to staff uniforms to guest experience, to meet the multi-level needs of contemporary consumer groups with diversified consumption scenarios, presenting a refreshing visual feast of Chinese culture.
• Our fully upgraded loyalty programme IHG One Rewards was officially launched, along with the new IHG One Rewards app and the WeChat mini-programme, making it easier for members to manage their benefits.

What are your thoughts and reflections on the Chinese market today?

The?policy signal to restore socio-economic normalcy?is loud and clear. We are confident about the recovery of the travel industry as we are in a healthy and vibrant market and a promising sector. We’ve seen rising market opportunities in all market segments, whether that is leisure, business or MICE, domestic, inbound or outbound. So, we believe the future of hospitality and travel is very promising.

China’s?14th Five-Year Plan?(2021-2025) for the National Economic and Social Development the Long-Range Objectives For 2035 have given us more confidence in our future development here. Tourism is being hailed as one of the strategic pillars of the Chinese economy, and China’s ‘Dual circulation’ and positive policies to promote consumption also bring more opportunities to the tourism industry and IHG.

How has CBBC supported you or British businesses during this time?

CBBC has been supporting UK companies to enter, grow and succeed in China for over six decades through strong advisory capability and distinctive networks. In the past three years of Covid disruptions, as a CBBC member, IHG has benefited from various aspects, be it the tailor-made and pragmatic programmes and events providing us diverse engagement and advocacy opportunities with high-level Chinese and UK government leaders, or the valuable platform for like-minded companies to connect to and communicate with in light of the rapidly evolving environment. Moreover, the high-quality policy analysis and content-oriented webinars equipped us with insightful business intelligence and helped us stay informed of the latest Chinese policy trends and business landscape. CBBC is appreciated to have been acting as the bridge between UK businesses in China and both governments, and we anticipate that moving forward, it will play a greater role with the bedrock of the 50 years’ heritage amid current geopolitical complexities.

What are your ambitions and plans for the future in China?

Our “in China, for China” development strategy remains unchanged. We see lots of opportunities in the?post-pandemic era?with the macro-policy support and pent-up demand. This bolsters our commitment to the China market with our purpose of True Hospitality for Good. As a leading international hotel group in China, we will continue to prioritise guests and owners, closely follow the national development strategy, boost industry confidence during this recovery period, and ensure a positive impact on employees, the world and the community.

Where we are going:

• First-tier cities:?We were early to identify the potential of expanding outside of First-tier cities, and have been adding hotels in emerging areas while the demand drivers are being built. In addition to new builds, conversion projects present huge opportunities as city renovation work goes on.
• Second to Fourth-tier cities:?The consumption upgrade has brought opportunities to upper midscale brands such as Holiday Inn and Holiday Inn Express. We’re accelerating in these markets with our Franchise Plus model tailored for China. We continue to explore Tier 2 and 3 cities to meet consumer expectations.
• Government agendas creating opportunities:?We are seeing great opportunities across many regions of China thanks to government initiatives like the Greater Bay Area,?Hainan Free Trade Zone, Belt and Road Initiative, large-scale development in the Western region, Yangtze River Delta integration and Jing-Jin-Ji (Beijing-Tianjin-Hebei)
• Increasing demand for domestic leisure travel:?We’re bringing our brands to more resort and leisure destinations and providing premium and personalised experiences. We are also continuing to drive luxury and lifestyle growth while strengthening mainstream and premium collections.

What do you think China will look like in another 50 years?

The past 50 years witnessed the economic boom of China, providing a vast and promising market for multinationals to grow and develop. For the next 50 years, we believe the China market will be increasingly prosperous, open and vibrant, and represent more exciting development opportunities for MNCs. In addition, the mutually beneficial relations forged in the past 50 years between China and UK will also help embrace those prospects in the future.

At IHG, we are very confident about the long-term outlook for our Greater China business. We will remain focused on our “in China for China” growth strategy and look forward to continuing to contribute to a prosperous shared future for the two countries in the next 50 years.