Hyatt and Hilton are taking different branding approaches inside China

2019/7/28 10:54:10
Global hotel chains are going beyond kettles and congee to warm the hearts of Chinese domestic travelers, a market worth a reported $734 billion (RMB5.05 trillion) last year.
A key question remains whether it is better to launch a dedicated brand in China, or adapt a chain’s existing brands to the local market, which is expected to bloat even more as a government policy to boost domestic consumption continues.
Hyatt Hotels and Hilton are examples of two global chains with differing approaches to the same end point of snaring a bigger share of Chinese domestic travelers, whose preferences are continually evolving.
Despite having 19 brands globally, and a track record of 50 years in China with 74 operating hotels and more than 100 hotels in the pipeline, Hyatt is seeding a new homegrown Chinese brand, UrCove (pronounced as “your cove”), in partnership with BTG Homeinns Hotels Group.
Stephen Ho, Hyatt’s president of greater China for global operations, said both Hyatt and HomeInns believe there is a need for a China brand as it is “unique,” born out of an “unprecedented” marriage of Hyatt’s international quality and the local insights of Homeinns, China’s largest hotel chain.
“Our partner made it clear in our earlier discussions that they don’t want to become another ‘surrogate mother’ to our brand, like other tie-ups between local and international operators. We share the same view that a new brand is the best option to penetrate this high growth segment effectively,” Ho told Skift.
Hyatt isn’t the first to launch a dedicated China brand; InterContinental Hotels Group was first with Hualuxe Hotels and Resorts in 2012.
But while Hualuxe targets upscale domestic travelers with a brand that is steeped in Chinese etiquette, culture, and heritage, UrCove homes in on young and rising middle-class leisure and frequent corporate travelers with hotels that offer good location, modern design, functionality, practical amenities, F&B excellence, and technology staples such as mobile experience, connectivity, and digital payment options.
Ho said this rising middle-class segment is “underserved.” In their private lives, the customers are “internationalized, independent, and tasteful” and would use premium hotels for personal stays. But on business trips, they usually have to settle for a compromised stay in midscale hotels due to limited corporate travel and entertainment budget.