Eyeing growing demand, Mandarin Oriental to further invest in China

Mandarin Oriental Hotel Group said it will continue to invest in different cities in China — a massively important market, to satisfy the growing demand of discerning and sophisticated Chinese consumers.

The luxury hotel company said that China accounts for about 20 percent of its total business, and there is still large room for growth in luxury, high-end products and experiences in the country.

The group, with 41 properties globally, was established through a collaboration between The Mandarin in Hong Kong and The Oriental in Bangkok, Thailand.

Mandarin Oriental opened a new hotel in Beijing's Qianmen area in September, its second in the nation's capital and the 10th in China. The other in Beijing is in Wangfujing.

The Qianmen hotel, located in a hutong, or traditional Chinese alley formed by courtyard compounds lining both sides, neighbors Beijing's landmark Qianmen, and is designed with courtyard houses, as the group said it makes sure that every hotel has a link to the local culture.

"We now have this second hotel here, showing that we believe the capital city has a lot to offer. Infrastructure is developing very nicely. Internal tourism is also developing and being in Beijing with two flagship hotels was an important milestone and showing the confidence we have in the economy," said Laurent Kleitman, CEO of Mandarin Oriental. "China is one of the largest economies, and there is no reason why we should not continue to look confidently at how to grow, strengthen and develop our business in China."

The CEO said beyond the boom of luxury goods, he believes that it's time for luxury experiences, and he is very confident about the evolution of consumption over the long term in China.

More of the group's hotels are in development on the Chinese mainland, including in Chengdu, Sichuan province; Hangzhou, Zhejiang province; and Nanjing, Jiangsu province.

Consulting firm Bain & Company said a resurgence in tourism and consumers' appetite for luxury experiences has facilitated stable growth in the market, but brands will need to rethink their value propositions to remain relevant, despite growing competition.

The consultancy said for the global luxury market, a continuing trend is favoring experiential offerings over tangible goods. Particularly notable is the steady growth in hospitality as well as gourmet food and fine dining, fueled by the recovering tourism industry and growing demand for immersive experiences.

China has become the world's second-largest tourism market following the United States, and its rapid recovery has attracted global attention. Some of the world's other largest tourism markets include Germany, Japan, the United Kingdom and France, according to a report by the World Travel and Tourism Council.

According to the China Tourism Academy, the number of foreign visitors to China in the latter half of the year is expected to exceed 15 million, fueled by unprecedented favorable entry policies that China has continuously issued since last year.

Mandarin Oriental said it believes there will be a big comeback of international travelers in China. Besides, the hotel has seen a shift in guest demographics from mainly business travelers to family travel, gatherings and celebrations, and the target groups have become larger and more diverse.

"We have some people who are living not far from the hotel and staying at the hotel, so a 'staycation'. We have guests from Beijing who want to come and stay at the hotel. And it's true in other cities, such as Shenzhen and Guangzhou," Kleitman said.

Looking ahead, Kleitman expects a new growth cycle for the hotel. "We are starting a new growth cycle in China, Asia and globally. The first element of the strategy is to further elevate Mandarin Oriental into a higher-end luxury hotel," he said.

"Innovation around culinary, wellness, leisure activities and the discovery of communities will absolutely accelerate the growth. I am also convinced that the strength of our business must be rooted in sustainability," he added.

zhuwenqian@chinadaily.com.cn