Hilton Sets New Standards for Upscale Focused Services Hotels in China
DATE:  Jun 19 2024
/ SOURCE:  Yicai
Hilton Sets New Standards for Upscale Focused Services Hotels in China Hilton Sets New Standards for Upscale Focused Services Hotels in China

(Yicai) June 19 -- Hilton unveiled Hilton Garden Inn · Gen A, a new regional prototype for China on June 13. Over the next 12 months, Hilton Garden Inn · Gen A will be introduced in cities including Nanjing, Chengdu, Chengde, and Jinan.

Hilton Garden Inn · Gen A is a prototype Hilton created based on Chinese travelers insights and evolved needs. 'Gen A' is short for Generation Alpha, the newest generation of travelers.

Last year, global tourism recovered, as the pent-up demand for holidays and travel was thoroughly released. The occupancy rate of Hilton hotels in the Asia-Pacific region exceeded 70 percent last year, with the company's revenue per available room up 79 percent from the previous year, according to its latest annual earnings report.

Hotel operators have been competing in the Chinese market since the end of the Covid-19 pandemic, given the consumption potential of the local middle class. The economic development led to a wider middle class and made Generation Z and Millennials the major target consumers. Therefore, with new consumer preferences, the hotel industry shifted its focus from size- to quality-driven expansion.

The number of mid-end and upscale hotels signing in the Chinese mainland jumped 48 percent to a five-year high last year from the year before, according to a report issued by hospitality-centered consultancy firm Horwath Hotel, Tourism, and Leisure.

"We found from surveys that consumers pay more attention to value and cost-effectiveness," said Jenny Milos, VP Focused Service & All Suites Brand Management, APAC, Hilton.

"What they need is not necessarily for value for money only, as they hope to find a balance between approachableness, high-quality service, and airy design," Milos noted. “We aim to build Hilton Garden Inn into a preferred brand which can meet consumers' demand for such balance.”

Unlike full-service and luxury hotels, Hilton Garden Inn is more flexible and efficient in site selection, engineering and construction, and manning straucture. Hilton Garden Inn plays an important role in the Hilton's global expansion plan.

Hilton Garden Inn's Fourth-Generation Product

It has been 10 years since Hilton Garden Inn first hotel launched in China. Hilton Garden Inn · Gen A is the fourth-generation product.

Naturalistic design is the main feature of the new product. Hilton Garden Inn · Gen A retains a brighthearted hospitality spirit while introducing the theme of blossoming growth. Drawing inspiration from botany, in particular plants' process of change, the product incorporates natural elements, such as petals, stems, and leaf veins, into the design and decoration to create a relaxing, familiar, and positive environment from the moment guests walk in.

Hilton also puts emphasis on enhanced functionality. Centrally located in the space, the 4-IN-1 is a multifunctional component offering drinks, retail, solitude, and social modules. It is surrounded by other functional areas, including dining, co-work zone, quieter zone, and arrival, allowing seamless transitions between activities and moods. In the rooms, guests can also find a sit & stand desk.

These desks are specially designed for Chinese consumers. Milos’ team learned that Chinese consumers want a more business-friendly space. Therefore, the work space in the guest room in China is more business friendly when comparing to that in other parts of Asia, the US, and Europe.

Hilton Garden Inn's first hotel in China opened in Shenzhen with the launch of its first-generation product. The hotel was located in Shenzhen’s Baoan district, close to the Shenzhen Baoan International Airport's new terminal, instead of districts like Luohu and Futian, where all deluxe hotels were located.

Hilton Garden Inn will keep its brighthearted hospitality spirit regardless of the evolving prototype, Milos said. The Chinese Hilton Garden Inn prototype illustrates connections between urban and natural growth. Meanwhile, it provids upbeat services with brighthearted manner, she noted.

When Hilton Garden Inn entered its second- and third-generation prototype era, the branding and design teams recognized they needed to break conventional standards, improving existing products to help increase the rate of return of franchisees and investors. The introduction of the third-generation prototype became a crucial turning point.

"We attach great importance to the functionality of rooms and value the rate of return of franchisee and investors, so we plan the spaces in a purposely and efficient manner," Milos pointed out. “You can see our licensing agreement signing speed began to speed up five years ago, when the third-generation prototype was launched.”

At that time, the Chinese market was mature enough, with target consumption groups ready to accept any type of hotel services instead of limiting themselves to conventional and formal patterns. Hilton began to change the design of Hilton Garden Inn hotels, offering consumers more approachable services in a more comfortable environment. As a result, franchising contract signings increased quickly.

After the pandemic, Milos' team learned from surveys that customers not only want a functional room with convenient facilities to do office work but, more importantly, a place satisfying their personal needs, which can balance work and life. With such insight, Hilton Garden Inn rolled out its fourth-generation product: Hilton Garden Inn · Gen A.

In terms of services, Hilton Garden Inn has partnered with new-generation brands. For example, it joined hands with lifestyle brand Chef Nic to bring unique floral dumplings to the breakfast table. It also cooperated with Chinese fashion designer brand Haizhen Wang to make new uniforms for hotel team members with the designer's signature silhouette.

All these are brands popular among the newest generation of travelers , which were chosen to further enhance Hilton Garden Inn guests' elevated experiences in the Chinese market.

Hilton Garden Inn · Gen A also has improved efficiency in design and construction, thanks to a flexible kit-of-parts approach to furnishing. Components are fully reusable, perfectly suited for leased properties, and can be easily updated. Well thought-out material selection, building, and furnishing methods and operations will all contribute to cost effectiveness in development and operation.

Redefinition of Business Trips

Light, bright and airy design are the major features of Hilton Garden Inn. Nature inspired colour tones combine with natural finishes and organic patterns to create a space which is welcoming and approachable. Here, hotels are no longer formal and old-fashioned but convey a sense of relaxation and friendliness.

Business trips will be redefined in the future, according to the Hilton Trends Report 2024. Over one-third of Gen-Z and Millennials said they would prolong their business trips to enjoy their leisure time before or after work.

"Nowadays, consumers will spend more time to experience customs and practices of the city they are in, especially when they visit for the first time," Milos said. "Having more emotional value is becoming normal, so the adjustments to our hotels also include how to make guests better explore a city and enjoy new experiences when not working.

"While ensuring that the experience complies with the brand spirit, Hilton wishes to localize the experience in a way that can be scaled up and easily replicated to also balance investors' returns, as Hilton must consider all aspects," Milos pointed out.

In the past two years, newly licensed Hilton Garden Inns have been striving to achieve a balance between business and leisure. The location of the hotels and the incorporation of local elements are integral parts of this effort. For example, the Hilton Garden Inn Jingdezhen Taoyuan Valley, expected to open in the second half of the year, embraces the ceramic cultural elements of Jingdezhen and incorporates blue and white porcelain patterns and camellia decorations into its design.

From the existing development strategy perspective, Hilton Garden Inn prefers locations in the city center and high-speed railway stations, following the 'core cities, core locations, core business districts' pattern.

The Hilton Garden Inn Beijing Yizhuang, expected to open next year, is located in Yizhuang New Town, a high-level automated driving demonstration area in Beijing. The Hilton Garden Inn Nanjing South Railway Station Zengli, also scheduled to open next year, is only a 15-minute walk from the Nanjing South Railway Station.

With China's urban renewal strategy and reasonable commercial property prices due to a high vacancy rate, hotels will be the best format to transform, upgrade, and revitalize these properties, said Xia Nong, president for development of China and Mongolia at Hilton.

The Hilton Garden Inn Nantong Haohe Scenic Area, located in downtown Nantong, is an excellent example. It completed construction and renovation with efficient design, allowing the project to incorporate garden elements to the greatest extent possible in a short period of time and with minimal upfront investment.

In the first quarter of this year, Hilton Garden Inn signed 30 franchising agreements in China and will open in new cities, including Ordos, Taizhou, and Zhanjiang. As one of the fastest-growing brands under Hilton, Hilton Garden Inn has built nearly 250 hotels in China under the franchise and entrusted management models since 2021.

"Thanks to efficient costs and shorter construction time, every penny of the upfront investment is fully utilized, and every development node can be achieved effectively," said Xia. “Moreover, the brand's premium and the hotels' stable operation abilities bring more revenue and maintain stable operations throughout the whole operation cycle.”

Editor: Futura Costaglione

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Keywords:   Hilton