Global hotel chain operator Hilton is confident of the growth potential of the leisure travel market in mainland China and plans to continue its rapid expansion in the country, with a focus on niche brands.
The company, which owns brands such as Conrad and Waldorf Astoria, aims to open at least 100 new hotels in China each year over the next few years to meet rising travel demand, Qian Jin, president of Hilton Greater China and Mongolia, said in an interview.
“Niche brands are in high demand to offer tourists personalized services,” he said. “We need to fine-tune these brands as we focus on specific destinations to capitalize on growth opportunities.”
Hilton opened its first mainland hotel in 1988 and launched a rapid growth program in the world’s second-largest economy in 2019, overtaking international competitors such as InterContinental and Marriott in terms of new openings.
The operator’s portfolio now includes 700 hotels in mainland China, Hong Kong, Taiwan and Macau, an increase of 367 percent compared to the end of 2018.
In addition to its luxury brands, the company also manages a variety of hotels in China under brands such as Canopy and DoubleTree to meet different needs and preferences.
The group’s mainland activities include 10 brands and 240 destinations.
On August 16, Hilton announced the opening of the Conrad Chongqing as its 700th hotel in China. It is also the hotel giant’s 15th Conrad hotel in the country.
Alan Watts, president of Hilton Asia-Pacific, said in a statement after the company reached the new milestone that one in three hotel rooms under construction in mainland China carries a Hilton flag.
“As the fastest-growing international hotel company in China, we continue to lead the industry and are better positioned than ever to extend our unique hospitality to even more destinations in the country,” he said.
Qian said it was quite likely that the US hotel group could open a new hotel on the mainland every two days in the future.
“We have been actively studying consumer habits and working hard to quickly adapt to changes in consumer behavior,” Qian said. “Chinese tourists are more accustomed to digitalized services, so we have strengthened our digital team to strengthen our growth strategy.”
In the first half of 2024, Hilton expanded its presence to 25 new mainland locations, including Changshu in eastern China’s Jiangsu Province and Guilin, a popular tourist destination in southwest China’s Guangxi Autonomous Region.
Major international brands – from retailers to hotels to fast-food restaurants – are increasingly expanding into undeveloped parts of mainland China. In a sluggish economy, they are pursuing a low-price strategy to appeal to the large number of less affluent customers.
Hotels in mainland China can generate an annual return of about two percent for investors, which can be increased with the right market positioning and solid management, JLL said in a report in May.
Zhou Tao, head of the hotel and restaurant industry at JLL in China, says the return on investment could be increased to four percent if management costs are efficiently controlled and customers are offered affordable restaurant services.
The Chinese hotel market is expected to grow by 8.9 percent annually and exceed the $166 billion mark by 2028, according to a report by management consulting firm Renub Research in September. The increase in tourism, a growing middle class and government initiatives to promote the industry are responsible for this.
