Hilton exec: We have full faith in China

The COVID-19 outbreak has resulted in new tourism trends, such as an explosion in short-haul trips around the vicinity of megacities and a rise in takeout services from premium restaurants, according to a senior executive at Hilton Group.

The US hotel giant will push ahead with its goal to operate 300 premises in China by the end of this year "with even more aggressive moves," said Qian Jin, area president of Hilton Greater China and Mongolia.

"We have full faith in China as it is the first to flatten the virus curve and get economic activity restored," he told China Daily in an interview in Shanghai.

"To add another 45 hotels by the year's end, we really need to seize the day to keep pace with the designated schedule," he said.

His remarks came amid Hilton's announcement that it will resume operation at all its hotels on the Chinese mainland. This makes it the first region where the company trades to do so, following novel coronavirus-related disruptions. At the height of the outbreak in China earlier this year, some 150 of its hotels were forced to close.

A gradual rise in guests has been reported across several key Chinese cities, like Hangzhou, Chengdu and Xi'an, where a majority of customers travel for leisure purposes.

The company even reported full occupancy in some of its properties during the five-day May Day holiday.

Qian said the virus has forced people to bond as a family in smaller groups. Given concerns about air travel, a 90-minute to two-hour drive to destinations near cities has become a new favorite. At these locations, a balance of convenience, natural scenery and relative isolation are enjoyed.

This changing sentiment could serve as a reference point for the adjustment of upcoming business portfolios in China. The aim is to introduce the right brands to the right locations, he noted. It has also imposed requirements on hotel management, from increased disinfection frequency and intensity, to the revision of service protocols like food services.

To this end, the company has adopted food audit systems and introduced new programs like Hilton CleanStay to meet the demanding hygiene needs.

"For example, to resume buffets in some of our properties, we need to come up with one-on-one servicing, increased intervals of new dishes, more careful seating and meal-display arrangements," he said.

"Some of these China-debuted protocols will become best practices that could also set the standard for our global operations when lockdowns overseas start to phase out."

Other noticeable and long-lasting changes include people's desire for takeout services and the reliance on digitalization for purchase and contactless services.

The company has banked on technologies like livestreaming and online-to-offline platforms to boost catering deliveries. It is also on course to introduce digital keys to all newly-launched premises to minimize physical contact. Digital keys are a function on the Hilton app that allows guests to open doors with their smartphone.

COVID-19 has afflicted global businesses and the hotel industry in particular. The Chinese Center for Recreation and Tourism Research has estimated the total loss of Chinese tourism for 2020 could reach 3 trillion yuan ($421.04 billion).

The domestic hotel market saw room occupancy rates reach roughly 35 percent by April. Such a rebound is likely to continue in May thanks, in part, to the May Day holiday and the resumption of domestic business trips, said Chen Xin, executive director at UBS Securities in China.

"COVID-19 will fundamentally change people's perceptions of hygiene and property disinfection, which will give newer hotel chains a clear edge," he said.

Chen predicted that the fastest pickup will be in midscale hotel chains, which typically charge between 300-500 yuan per night in most Chinese cities. At the same time, international high-end brands could face pressure as international business travel, a big chunk of their income, is largely at a standstill.

"In the coming five years, the luxury hospitality segment is likely to retain around 20 percent of the market. But we are likely to see the introduction of higher-end brands under this category with premium services being the ultimate game changer, especially in the post COVID-19 period," he said.