Regional hotels adapt catering to Chinese tourists and millennials

The rise of the Chinese tourist as a global force and Generation Y are forcing the region's hotels to adapt a different approach.

At the Arabian Hotel Investment Conference in Dubai yesterday hotel operators discussed the new trends and themes for welcoming guests. But top of the agenda was the fact that Generation Y – people born between 1980 and 2000 – and a burgeoning Chinese middle class have changed the way hotels operate.

“We see three key themes driving business in the near future – China, China and China,” said Clarence Tan, the senior vice president at InterContinental Hotels Group, which manages 79 hotels across the Middle East. “We have trained 10,000 staff globally to be Chinese-speaking and responsive to Chinese clients. Seven out of our 18 hotels in the UAE are China-accredited because we believe the Middle East will be the next geography to see a massive influx of Chinese visitors.”

Dubai attracted 344,329 guests from China last year, a 25 per cent increase over the previous year, and Abu Dhabi attracted 120,350 guests, a 166 per cent rise from 2013. Besides, a report from the consultancy Oxford Economics and the InterContinental Hotels Group, showed that Chinese travel to Mecca and Medina is forecast to rise by 50 per cent by 2023.

The investment needed to alter a hotel’s policy towards a certain culture or age group is significant. “It is a very difficult decision whether to focus on millennials or Chinese or older generations, but some decisions are obvious,” said Mr Tan.

According to the World Travel and Tourism Council, 1.1 billion travellers crossed international borders in 2014 with that figure expected to grow 58 per cent by 2025 to 1.8 billion.

Another report from Bank of America Merrill Lynch showed that 174 million Chinese tourists are tipped to spend US$264 billion by 2019 compared with the 109 million who spent $164bn in 2014, and 60 per cent of those will be below the age of 34, categorised as millennials.

“Millennials are the people that know, use and love technology,” said Linda van der Walt, design director with the hotel interior designers Samuel Creations. “Most new hotels and all the refurbishment that is taking place in Dubai requires a big investment in technology in the rooms. From bedroom management, meaning the lights and the AC, to LED panels outside the door that allow fingerprint access or say ‘do not disturb’ or ‘clean my room’.”

Industry executives said that other more geography-appropriate decisions can be made without a sea change in a hotel’s business model.

“It is obvious that millennials will be travelling and they may not be as drawn to opulence and extravagance as older travellers,” said Salim Bitar, the chief executive of Aujan Group Holding, which owns and operates the Oberoi Hotel in Dubai.

“The new design district in Dubai is a perfect place for a three or four-star hotel that has wide open social areas, a healthy breakfast, free Wi-Fi connectivity, a great gym – and you have a budget hotel that caters to younger travellers in a location that suits it perfectly. It doesn’t matter if you speak Chinese or not. It’s business sense.”

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