Hotel giant IHG to introduce China-inspired brand to the world

Next 3 to 5 years will see 240 IHG hotels open in China, including 22 Hualuxe brand properties

PUBLISHED : Thursday, 27 April, 2017, 6:30pm
UPDATED : Thursday, 27 April, 2017, 10:45pm

InterContinental Hotels Group (IHG) said it will launch its China-inspired brand Hualuxe on the global market when the time is right, adding to a series of initiatives undertaken in the past two years to woo Chinese travellers.

The group, which owns brands including InterContinental Hotels & Resorts, Crowne Plaza Hotels & Resorts, Holiday Inn, and Holiday Inn Express, opened its fifth Hualuxe hotel, and its 300th property in Greater China, in Zhangjiakou on Wednesday.

“It’s about [finding] the right owners of the property, the right asset in a key global city’s prime location. When we’ve got that, we’d like to announce,” Kenneth Macpherson, IHG’s chief executive for Greater China, said when asked by the South China Morning Post of plans to bring Hualuxe to the world. “It’s also important that when you bring a brand to the global market that it is well-established and works in its home market.”

It’s also important that when you bring a brand to the global market that it is well-established and works in its home market
Kenneth Macpherson, IHG’s chief executive for Greater China

IHG launched the Hualuxe Hotels and Resorts brand in February 2012, a name derived from the Chinese word hua, meaning “majestic China” plus luxe, referring to luxury. The first Hualuxe hotel was opened in Yangjiang, Guangdong province, three year later, and subsequently in Nanchang, Haikou and Kunming.

The push to promote the Hualuxe brand is one of several efforts by the UK hotel giant to woo Chinese consumers. In 2015 it launched a tailor-made service –“China Ready”– where Chinese travellers overseas are serviced by Mandarin-speaking employees at front desks. They can also use China UnionPay cards to settle their bill, watch Chinese television channels in their rooms, and order Chinese cuisine and beverages.

Luxury hotel chain eyes huge growth through tailor-made services for Chinese travellers

Illustrating the importance of the China market, revenue per available room – a key performance metric in the hotel industry – grew by 3.9 per cent in 2016 on the mainland, easily beating the 1.8 per cent growth globally for the group. In first-tier Chinese cities, RevPAR grew 6.3 per cent.

Macpherson said there are a further 22 Hualuxe hotels in the pipeline, including new ones opening very soon in Beijing, Shanghai and Sanya. Under the whole group, 240 are due to open in the next three to five years. IHG has penetration and distribution across nearly 130 cities in Greater China, with more than three quarters located in smaller cities.

In 2015 IHG bought Kimpton, a US boutique brand known for its bold and playful design. It said it also wants to introduce the new brand to China.

“We see an increasing demand for guests in this segment to enjoy more personalised hotel products, especially in the Asia market,” Macpherson said. IHG is exploring opportunities with its business partners to see if it can bring Kimpton Hotels & Restaurants into the China market “at the right time and right location”, he added.

Zhangjiakou, a city 180 kilometres north of Beijing, will host the 2022 Winter Olympics and the new Hualuxe hotel there is expected to offer accommodation, meeting and dining facilities to Olympic-related guests. Richard Solomons, chief executive of the global chain, said the hotel was designed prior to Zhangjiakou’s successful Olympics bid so it would have been launched even without the games.

“A more nearer development is the launch of a high-speed railway, 43 minutes [from Beijing to Zhangjiakou]... the incredible natural resources of the city, the opportunity for thousands and thousands of Beijing residents to come,” Solomons said. “The Olympics is incredibly important, but there is a far bigger, sustainable driver.”