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Hong Kong hotel group Dorsett is on track to give its peers a run for their money. Group president Winnie Chiu tells Edith Lu that going after Chinese mainland travelers worldwide will be their chief focus in the years ahead.
For hotel operator Dorsett Hospitality International, its "Chinese wallet" strategy is here to stay as deep-pocketed Chinese mainland travelers continue to roam the planet, forcing global hotel groups to keep upping the ante for a slice of the pie.
Dorsett, which was set up in 2007, has followed the footprints of mainland tourists around the world, trying to meet all their needs wherever they go.
Winnie Chiu Wing-kwan, Dorsett"s president and executive director, says more than half of the mainland tourists prefer three or four-star hotels and these are the company"s chief focus.
Chiu — who took the helm at the hotel chain, which is part of her family business, in 2010 — says the group is very city-based and believes in key gateway cities.
Dorsett currently owns and manages 33 hotels worldwide under three labels — Dorsett Grand Hotels and Resorts, d.collection and Silka — to satisfy the demands of various market segments. It has found its feet in Hong Kong, the Chinese mainland, Malaysia, Singapore, Australia and the United Kingdom, tapping into popular destinations among mainland tourists.
"We prefer Commonwealth countries as we understand more about their legal system. It will be easier to grow business there as we do management and construction as well. And construction often comes along with many legal matters," says Chiu.
She is also bullish about the Belt and Road markets, confident that their "Chinese wallet" approach fits in perfectly with the B&R Initiative, as it has opened many doors for Chinese companies to invest there.
Thus, many business travelers will spend time on projects in those countries. During their stay, they would prefer to live in hotels with Chinese-speaking staff and Chinese-food restaurants — a big advantage for Chinese-brand hotels compared with local ones — reckons Chiu.
She cites Malaysia — Dorsett"s second-largest market — as an example. As a major oil and natural gas producer in Southeast Asia, Malaysia is expected to attract more mainland oil-and-gas companies. Chiu believes Dorsett"s hotel there is an ideal choice for mainland companies" business travelers.
Another nine hotels are scheduled to open within the next few years. The hotel chain is also seeking opportunities in other B&R countries like Vietnam and Thailand.
Occupancy rate up
While Hong Kong remains the main contributor to Dorsett"s overall performance, the city continues to attract mainland travelers. It received more than 20 million mainland visitors in the first five months of this year — a 12.7-percent year-on-year increase — according to the Hong Kong Tourism Board.
Recovering overnight visitor arrivals drove the group"s occupancy rate and revenue. Dorsett"s revenue from the Hong Kong market accounted for about 51 percent of the group"s total revenue for the 12 months to March 31 this year.
As a subsidiary of local property developer Far East Consortium International, which was founded by Chiu"s grandfather Deacon Chiu Te-ken, the hotel group has its roots in Hong Kong with 11 hotels and more than 3,200 rooms, commanding a 4.06-percent market share in the city"s fiercely competitive hospitality industry.
Chiu expects the local growth momentum to continue surging in the coming years. She is optimistic about further maximizing revenue and enhancing market competitiveness through their newly-opened hotel in Tsuen Wan, which has rapidly ramped up sales.
Dorsett runs four hotels on the mainland. But Chiu says they"re just for raising Dorsett"s reputation among mainland tourists, as the group will keep focusing on outbound markets.
To further lift Dorsett"s brand exposure, the hotel chain did research on the habits of mainland travelers and found that more and more travelers would choose to book online for their overseas trips. According to a report by financial firm CLSA last year, about 80 percent of outbound mainland travelers now make their bookings online.
Hotel chains expect online travel platforms to be the biggest winner at present, as members of the younger generation — the main force of outbound travelers — are very much impulsive travelers. Their bookings are usually done at the last minute. "Easy come, easy go" has become the theme of their travel plans.
Aimed at offering greater convenience to mainland customers, Dorsett plans to open an online store on Alibaba Group"s travel unit Fliggy, and has run promotions with on-demand services platform Meituan Dianping. Besides collaborating with travel platforms, it has launched official accounts on social media platform WeChat, enabling customers to book and confirm their journeys easily.
"Opening different channels (for bookings) is very important, but not many hotels see opportunities like that," says Chiu. "Also, once you get to the distribution channel, you should open your payment gateway."
She says Dorsett is working hard to widen digital payment methods. So far, all of Dorsett"s hotels in Hong Kong and on the mainland accept WeChat Pay and Alipay — the two most common digital payments among mainland travelers. Digital payments for other hotels outside Hong Kong and the mainland are under development as well.
Another new industry that"s driven by digital payment is the sharing economy. It appears that the onset of the sharing economy has made Airbnb — a home rental portal — a competitor for regular hotels.
But Chiu reckons people staying in hotels and those who choose Airbnb houses look for different things.
"I don"t see a huge competition. They"re different markets. If customers travel with kids, maybe they"ll go with Airbnb. But, if they"re on business trips, they"ll just choose hotels."
"But, it"s healthy (for travelers) to have a choice."
Contact the writer at [email protected]