China's Progress Toward International Competitiveness in Hospitality.
Weekly column by Sarah Muxlow ~ exclusively at 4Hoteliers.com.
Thursday, 26th July 2007
Working toward international competitiveness has become of utmost importance to China as it's hospitality industry continues to boom -

This year China's commercial markets such as Beijing and Hong Kong have recorded growth in excess of 20%, and Shanghai increased by 17%. These high growth rates are predicted to continue.

The increase in international and domestic travel alike, is prompting the lodging industry to search for highly skilled employees, insist on high international standards within it's 4 and 5 star sector establishments and provide the service quality required to build customer satisfaction and loyalty.

These aims are not so easy to achieve and it has been a long and steep journey of discovery for China so far. In 1978 when China first opened its doors for international visitors, the lodging industry was far from ready, in that there were so few hotels. Consequently China's 5 year plan between 1981-85 focused on Hotel development.

When expanding and developing, hotel companies looked at both the Chinese owned and multinational hotel corporations. Given that the global hotel industry is dominated by chains, there was the assumption that China's hotel future would be formed in the same way. However, there have been many barriers preventing international chain establishment that have only recently been overcome.

Primarily issues that confronted overseas investors were the economic and political systems that were in place. Whilst China is still currently working toward a market oriented economy which in tern will give a better business environment for hotel development, the country has not yet finished it's economic transition. Up until the world trade agreement, overseas hotel investors whilst encouraged, were under government control. Now that China is unable to control overseas activities, there is the freedom to operate in the way the lodging industry sees fit in the given environment.

In the past, the majority of hotels in China were Government owned and were not operating to the standards of 4/5 star operations overseas. State owned hotels have complicated ownership and don't behave like commercial businesses. Hotels that belonged to the government department, have been described as conservative with ideas, lacked vitality and sensitivity to the changing market and environment. They follow traditional administrative systems, the central planning was still in place and there was still too much bureaucracy.

By the mid 90's however there was a recorded over development with surplus bed left unfilled. The new lodging industry was operating in the red but looking at becoming competitive. Competition that is between themselves to provide outstanding product and services and benchmark against international standards and countries in the same region.

Geographically China competes in the same market in Asia-pacific as Singapore, Hong Kong and Thailand, three well established and sophisticated tourist destinations. The need to ensure investors and owners success within China, means hotel managers giving attention to areas that badly needed improvement. The main concerns to dates are physical facilities and service standards.

In terms of product and physical facilities, Hoteliers within China are making great progress by adapting and taking on overseas and international hotel concepts and design. Regular and improved property maintenance and sanitation have featured highly on the to-do-list alongside the use and installation of reliable reservation systems.

New operations and management styles have had to be learned. There was a need to learn different business and management techniques. Typically managers within China have very little contact time with guests but are responsible for judging service quality and making decisions for change. In recent years, Managers have been confronted with visitors who have expectations based on international standards. Understanding tourist expectations has taken time and a great deal of exploration. However, it was frequently assumed that tourists expected more than they actually did. When surveyed, it was discovered that customers were in fact looking at the decoration, facilities and cleanliness and were concerned by what they found.

Guest feedback forms are a new concept and are confronting for the management style that allows for what has been described at times as the self-assured and oblivious.

In terms of human resources, there was until recently a difficulty in finding trained and knowledgeable Chinese staff. The concept of service has in the past been non existence. In response to the demand in the labour market, thousands of Chinese hospitality students head for Europe to be trained. There has been a strong emphasis on training in languages and communication as well as Western and Fusion dining.

The aim to attain international standards and quality of services and operations is still top on the agenda and is likely to stay there. The test will be when international visitors flock to the Summer Olympics in 2008, which are coming closer.

SpotLight is the weekly column exclusively written for 4Hoteliers.com by Sarah Muxlow, it is highlighting the challenges and issues which the global hospitality is facing today.

Sarah is writing for hotel and restaurant owners, hotel chain managers, producers/growers/sellers of food & beverage, restaurant associations, governing bodies and hotel schools. She is looking at the problems they face...competition, trends of branding, staff shortages, unskilled staff, turning out students who are looking for good in-house management training schemes with hotel chains, what makes a good quality training course at a hotel school and more... 

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