How does a small hotel group make its mark on a big and increasingly important market? Pamela Whitby finds out

It seems an unlikely combination; a small ‘passionately Swiss’ hotel chain meets Sanya, the Chinese answer to Hawaii. Undoubtedly this is a sign of the times. “You cannot do anything in any industry today without thinking about China and the travel industry is certainly no exception,” says Markus Mueller, Mövenpick Hotels & Resorts’ vice-president for sales and marketing for Asia. This is about two things: China’s sheer size and also because of rising numbers of outbound Chinese travellers.

He is not wrong. According to the Global Tourism Economy Research Centre Global Tourism Economy China is currently the world’s second largest travel and tourism economy as well as the world’s third largest tourism destination.  Today the total contribution of travel and tourism to gross domestic product is 9.2%. It also has growing numbers of outbound travellers – 39 million in 2011.  Put in perspective this Asian tiger’s outbound travel market is three times bigger than Japan which has dropped to 15 million from a peak of 17 million.  In addition, the Chinese are travelling more on both domestic and international fronts. Between 2010 and 2015 spend on travel accommodation in China is expected to grow by 20%.And growing numbers of people – 25 million each year by some estimates - are said to be entering the middle class.

Although it is a smaller travel brand Mövenpick doesn’t want to miss out. And it has good reason to believe that there may be a market here for its product. According to the non-profit organisation Swiss Center Shanghai exports to China and Hong Kong from Switzerland increased by 19% last year. This trend is in line with an increasing number of Chinese investors approaching Mövenpick Hotels & Resorts about possible future projects. Recognising the importance of local tailoring, in China Mövenpick will be known as Rui Xiang which means ‘brings you enjoyment and luck with Swiss quality’.

A two-pronged approach putting point-of-sale first

Not only is it actively marketing its hotels and resorts in markets the Chinese travel most to (the top five destinations being Hong Kong, Macau Taiwan, Japan and France) it is also opening hotels in China itself. “If you want to build awareness of the brand you have to have hotels in China,” he says. 

Many of the big hotel brands are already in China so how does a smaller new entrant go about raising awareness? Mövenpick has a two-pronged approach. As a smaller operation phase one will see the company focusing on point-of-sale marketing.  “We are doing this right now: targeting the key accounts and main travel agents to create visibility and economies of scale in the region and globally,” says Mueller.

Although the point-of- sale online is growing for both domestic and international travel, travel agents are still very important because of Chinese visa requirements for outbound travel. “Right now we are very actively targeting agents with the rights to issue visas,” Mueller says. It is about targeting wholesale partners first rather than consumers. 

Another focus in Mövenpick’s strategy is the point-of-search. There are currently 195 million internet users in China – that is three times the number in the UK. China has many travel portals (the top three by booking revenues are Ctrip, eLong and Mangocity) and this is a rapidly growing segment and one that cannot be ignored. Local social media sites are also widely used; in fact 25% of social media users worldwide are said to be Chinese and are using Facebook and Twitter equivalents - Daido and Weibo - to connect – something that all travel firms will be looking to exploit.

Phase two will involve the launch of hotels in China. The first of these – a resort hotel - will debut next year in Sanya – the Hawaii of China.  “We chose to launch an upscale product in Sanya first because this is a really popular domestic location. In China everybody wants to go to Sanya so what better place to build the brand?” Mueller says. In general people love to talk about holiday experiences and the great resorts they have stayed at; fewer people talk about the great stay they had in a business hotel.

Even so primary cities are major focus too and the company has signed a hotel deal in Shanghai and is investigating other first tier cities too.

The Sanya property will be marketed strongly at the point-of-sale but this will be supported heavily by a communications strategy supported by social media. Advertising is still big in China so there is plenty of scope for billboard advertising too. 

Partnering with big brands, partnering with locals 

While the company is too small right now for direct consumer marketing they have developed a few gimmicks with other brands. “In Hong Kong for example we have partnered with Nestle’s Mövenpick Ice Cream brand – when you book one of our hotels or resorts you get an ice-cream at the point-of-sale, reinforcing the brand message further” he says.

When it comes to doing business in China there will be challenges as things are done differently. All the advice is that in China, particularly, it is important to employ local people. So not only has the group adopted a local name, but its website is in Mandarin and it has appointed a new Shanghai executive team. “Building strong local partnerships is essential so we have just hired an international sales director in Shanghai to target the key accounts, including the portals and other offline Chinese travel agencies which we need to manage,” Mueller explains.

What about long term goals in China? Mueller won’t commit to numbers but he is clear that in China Mövenpick wants business hotels in the key cities and landmark resorts in the mountain reaches and near beaches. Let us wait and see.