Localization has been a desired path to follow by most hotel international companies in Asia;
Under pressure from hotel owners and local government to rely less on expatriates, and with programs in place to groom home-grown talent for at least 2 decades, we are noticing that in some fields the expatriates are in demand again.
One field stands out particularly in China: Sales & Marketing. We are starting to see similar trends across Asia in Sales & Marketing, Finance / Accounting, Revenue & Reservation Management and even Human Resources where we see hotels hiring expatriates again on positions that has been localized in the past decade.
Whereas Front of House positions, especially Food & Beverage, Front Office & General Manager, or Hotel / Resident Manager roles were always the departments perceived as the last bastions of the expatriate hotelier, back of the house departments were usually the domain to prioritize localization of the management.
To localize management positions and to reduce the number of expatriates is a totally logical path to follow. With excellent training and mentoring from the expatriates to the local talents the transition is made naturally to groom Junior Managers to Senior Managers.
The localization of the top management follows when Junior local management staff is trained & groomed by Senior expatriate staff, to take over the reigns, at the appropriate time. At the same time, a hotel being an ‘international company serving an international clientele’ sees the need to maintain some foreigners within the management, if only for the benefit of foreign guests and for some particular skills sets.
When TOP Hoteliers opened the first Executive Search Firm for Hoteliers in China, in 2004, the following 4 fields where almost exclusively open only to Chinese speaking candidates (local & expatriates) with a strong desire to localize, if possible: Sales & Marketing, Finance, Engineering and Human Resources. In the last year we are seeing, however, that hotels are again back to hiring Expatriate managers in these 4 domains, and even hiring those Expatriates who aren’t Chinese speaking.
The hotels that are hiring expatriates again in these positions, are typified in 2 different categories: 1) New high-profile hotel openings, usually of the top-line luxury brands or a new arrival of a hotel brand in the market, as well as those in the Small Luxury, Boutique and Spa & Wellness arenas.
But also well-established international branded hotels, operating for over 2 decades, which have undergone localization already. Some long-established hotels in China, in particular those that were the first to arrive in certain main cities, have literally gone full-circle with attempted localization: From a Western Expatriate, to an Asian Expatriate, to a Chinese speaking Expatriate, then to fully being localized, by local managers, the position then went back to Chinese speaking Expatriates, and now even sometimes to Non-Chinese speaking expatriates, be they Asians or Westerners.
And the learning curve in this process is not that localization is not a good thing to do but that there simply weren’t enough local talents available and willing to hold these jobs. While for all these jobs it would be helpful and make sense to speak the local language (including reading & writing), the advantage of understanding the language and knowing the local market has been overshadowed by other needs in the position.
For any senior management role solid experience and seniority is paramount, but to make a difference in a competitive environment, creativity and new ideas, exposure to worldwide international trends are needed and in an increasing level integrity & professional behavior are attributes required by managers.
However, the overwhelming reason for going back to expatriates with several positions is because the availability of local talents has proven to be too limited in recent years. In China, for instance, the demand for qualified hotel managers has simply outrun the speed at which local management can be trained up and readied for take-over.
In addition, especially the fields of Sales & Marketing, Finance, Human Resources and Engineering harbor skill sets that are more easily transferable to other industries, compared to the skills that Hotel Operational Departments require, and thus the Hospitality Sector has been training up talents in these areas of Hotel Management, only to see them picked up by other businesses, who equally need these (local) talents.
The luxury goods sector, which also sees its worldwide growth the highest in Asia is in particular keen on 5* and Luxury brand hoteliers, from the Sales & Marketing and Human Resources backgrounds. The Retail Sector is scavenging Front of House staff from hotels being able to offer better salaries, and better working hours. The Real Estate Sector is offering good jobs not only to Chief Engineers, but is increasingly pinching senior Hotel Executives, including Hotel General Managers to look after the launching, sales & management of Commercial, Housing Estates, Office Buildings, but also mostly mixed-used projects, with a hotel project included, or there where Real Estate companies venture into building, owning (and sometimes managing) Hotel & Resort properties.
In general, any commercial business that is in the service industry, is quite keen to hire (former) hoteliers. This is not unique for China or Asia, but it is taking effect now in Asia. As the economies keep growing and some are maturing, international hotels were often the forerunners that trained and groomed locals towards international management practices, customer service, to ensure that good English was spoken etc.
This has led to an exit of many promising hotel managers out of the industry. But those who stayed and did well because of the strong demand for local managers, have in the case of some cities also been ‘used and used-up’ in a decade where every new hotel opening in a city was keen to steal away the Director of Sales & Marketing or the Human Resources Director of an existing hotel.
A lot of the ‘locals’ in such cities have gone from hotel opening to hotel opening, in a space of 10 years to at least 5 different hotels and they have simply lost their edge, always performing the same trick but also been given the same task. If they haven’t been promoted beyond being a Director towards becoming a General Manager in the past 10 years, then the only motivator to switch employers would be a higher salary.
Now hotels want new blood, new ideas, and most of all they are no longer willing to pay the top dollar to pinch away a local from the competitor with doubts on the staying power of these, and since there is too little new talent coming up locally, it is back to hiring expatriates again.
While 5 years ago all our clients in China wanted Mandarin speaking Sales & Marketing Directors and Financial Controllers, we now see that hotels are hiring again those expatriates who are very qualified, just not Mandarin speaking. And this is good news for expatriates, however it should also be noted that the expatriate salaries and benefits are no longer what they used to be, before localization started in China.
René J.M. Schillings, a Dutch National, is the Managing Director of TOP Hoteliers, the first specialized hospitality recruitment agency to open offices in the People’s Republic of China (in 2004). Based in Hong Kong he devotes most of his time managing the 3 offices in Hong Kong, Shenzhen and Beijing, where his team of consultants recruit hotel managers for all major international and some local hotel companies in China. His company was very early to recognize the need for local talent, Mandarin speaking expatriates and China experienced expatriates. His knowledge of the China Hotel Industry stems from his career as Hotelier in China that began in 1997. He has a BA in Hotel Management from Stenden University, a.k.a Hotel Management School Leeuwarden, The Netherlands and an MA in International Tourism & Leisure Studies from Metropolitan University in London, England. He is a keen observer of industry trends and has published numerous articles on HR issues in hospitality in China & Asia. Working in China, Hong Kong & Korea since the late 1990’s, René has lived in Hong Kong from 2005 to 2012 and resides since 2013 in Thailand with his wife and 2 children.