Hyatt looks to the east

Hyatt enters partnership to develop Chinese-centric brand in China.
Hyatt enters partnership to develop Chinese-centric brand in China.

The competition to attract the swelling numbers of domestic Chinese travellers within their country continues among Western hotel companies. Last week, Chicago-based Hyatt Hotels Corp. said it had entered into a strategic joint venture with BTG Hotels Co., the parent of BTG Homeinns Hotels Group, to create a new hospitality brand in China that would compete in the upper-midscale segment.

"This collaboration is expected to provide Hyatt with deep China insights, build brand awareness and grow loyalty with a new set of travellers," said Stephen Ho, president, Greater China, global operations, for Hyatt in a statement announcing the venture. "Strengthening our representation in the underserved upper-midscale segment will advance our China commitment and is designed to deliver sustainable growth and value to all of our stakeholders."

According to China's Ministry of Culture and Tourism, domestic tourism revenue increased nearly 13% in the first half of 2018 over the previous year. With the appetite for travel expected to continue to increase, Western hotel companies like Hyatt are eager to attract a loyal domestic following that will translate into outbound international clients.

The new brand, whose name will be unveiled later this year, will be built specifically to meet Chinese travellers' expectations. While details on guest-room count, meeting space and food-and-beverage outlets were not disclosed, Hyatt and BTG Hotels said the brand will be developed in major gateway cities such as Beijing, Guangzhou, Shanghai and Shenzhen, and will be managed independently.

"Our goal is to pioneer a unique home-grown local brand with international backing that will serve as an important competitive advantage for both parties - a win-win situation for Hoeminns, for Hyatt and for the Chinese consumer," said David Sun, general manager of BTG Homeinns Hotels Group in a statement noting that there was significant opportunity for the joint venture to make a mark in China's growing upper-midscale segment.

In recent years, BTG Homeinns, one of China's largest and fastest-growing operators in the economy hotel segment, has invested in expanding its portfolio of midscale hotel brands. It currently has over 600 midscale properties across China flagged primarily to its Yitel Premium, Homeinnplus and Homeinn Selected brands.

Hyatt is not the first Western hotel company to court Chinese travellers on their home turf. In 2012, InterContinental Hotels Group launched Hualuxe Hotels & Resorts, a new Chinese-centric luxury brand designed to woo native travellers. In 2018 it opened its fifth property in the country, and there are currently 22 Hualuxe hotels in the pipeline, in cities such as Beijing, Shanghai and Sanya. IHG says another 240 hotels will open in the next three to five years.

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