Hotels Grapple with Chinese Tourist Boom

CNBC contributor Shaun Rein, who runs the Shanghai-based China Market Research Group, writes about a recent conversation he had with a Thai hotelier about the challenges of catering to as European traffic wanes:

The Chinese, he said, want lively, louder environments where they can shop for Louis Vuitton and Gucci bags and eat in large groups, while European visitors prefer a more tranquil, quiet, back-to-nature kind of experience. “When too many Chinese, Indians, and Russians come and we cater to them by opening shopping centers or set up large group tables, we see a clash with what the Europeans want. The Europeans leave and look for other quieter hotels, or different locations altogether. For instance, we have seen more Europeans leaving Phuket and going to Khao Lak and Krabi and other more peaceful areas.”

In other words, he was worried that he would lose his original core customer base by expanding it because the wants and expectations of Chinese are so different from other groups. Sharp differences in consumer wants and needs is a dilemma that everyone in the travel and leisure sector will have to handle – Chinese, Indians, and Russians are becoming the high-spenders, but how will that affect your current customer base?

Will wealthy European women want to buy Louis Vuitton handbags if they see so many middle class Chinese tourists carrying them? Can a hotel be both lively and peaceful? Can you cater to all groups and, and if so how, or is it better to focus on one group? The complexity of managing such an environment will be taxing.

As Rein points out, hospitality giant Intercontinental Group has managed the different needs of its European and Chinese customers by announcing plans last October to roll out a new China brand of mainland hotels.

February 7, 2012 3:08 AM
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