How Hilton created 'the right brand' to gain from China's domestic tourism boom

Canopy by Hilton Chengdu City Centre is built on a neighborhood hotel concept that appeals to any traveler seeking a locally-inspired experience, according to Steffen. It will offer services and spaces that will sufficiently cater to these demands.

“There will be two more Canopy by Hilton properties upcoming in APAC – Canopy by Hilton Hangzhou Jinsha Lake, opening in late 2019, and Canopy by Hilton Kuala Lumpur Bukit Bintang, opening in 2021,” adds Steffen.

Before launching the brand in China, Hilton commissioned a study with Kantar that surveyed 1,000 respondents aged between 20 to 45 across China, who have stayed in an upscale hotel at least once. The top line findings revealed that Chinese travellers today, bolstered by higher disposable income, wider international exposure and easier accessibility of travel, are more confident in exploring new destinations and seeking new experiences when they travel.

83% of respondents said they were keen to explore different local cultures, while 82% enjoyed self-pampering. 77% were open to socializing with locals and the same number said they were open to seeking out new experiences.

Commenting on the findings, Steffen says: “What is interesting is that these traits mirror closely those of the global audience that we spoke to when we first conceptualized the brand. It is encouraging for us to know that today’s Chinese travelers demonstrate a strong appetite to dive deep into the local culture and pay a premium for rewarding experiences.

“It affirms our decision to introduce the brand to China, where travelers also expect hotels to feature a blend of culture, comfort, socialization and personalization. Additionally, they seek places where unique spaces, special gourmet experiences and customized services come together to define a distinctive lifestyle.”

Additionally, the study also unveiled three common mindsets among Chinese travelers.

67% of respondents wanted to ‘work hard and play harder’. 54% of respondents said they seek out hotels that can offer an “invigorating experience”. 69% label themselves as the ‘me generation’. 50% said they prefer hotel walls to be curated with local items and 48% favor unique and stylish design decorations.

“With these findings as a start, we can stay informed of such nuances and can continue to optimize the performance of this next-generation hotel brand as we expand internationally, with 34 properties in our global pipeline,” Steffen adds.

Neuroscience

In addition to the study, Hilton also partnered with data measurement company Nielsen to test consumers’ emotional responses toward the Canopy by Hilton brand by using neuroscience to monitor their brain activity through EEG sensors and tracking eye movements. Deeper than the survey, it wanted to really learn its audience's unspoken preferences, likes and dislikes.

By pinpointing hot zones that consumers were focusing on, Hilton was able to identify qualities that clicked with consumers. Respondents responded positively to the idea of a ‘thoughtfully local’ offering, where the hotel serves as an extension of the neighborhood, offering a taste of the surrounding locale through distinctively local designs, food and drink, partnerships and more.

“We have always found it essential to listen to our consumers first. The innovations we have pioneered over the past 100 years, including the new brands we incubated, have all set new standards in meeting consumer needs,” explains Steffen.

“When we first conceptualized our lifestyle brand, we did extensive research to understand the key audiences who would engage with the brand, and now as we introduce the brand to China for the first time, we found a unique opportunity to dive into the Chinese consumers’ psyche and test the new brand’s local propositions through cutting-edge neuroscience.”

Steffen adds that with the rapid shift towards personalization in the digital and offline spaces, consumers now expect brands to provide targeted, tailored products and services. As such, Hilton will continue to use a human-centered design approach in its offerings to ensure that its brand appeals to the evolving tastes and demands of discerning travelers.

Smart hotels

Hilton is facing competition from unlikely sources in China as local brands like e-commerce giant Alibaba has moved into the hospitality business by opening a smart hotel that uses small robots to deliver room service to hotel guests by finding the correct elevator, floor and room using voice recognition technology, IoT infrastructure and machine learning.

Innovation is in ‘Hilton’s DNA’, says Daniel Welk, the vice president of luxury and lifestyle for APAC at Hilton. But that innovation must be directed by purpose, and effectively addresses consumers’ needs or pain points. Therefore, instead of automated hotels, he says Hilton is focused on using tech to reimagine the entire travel experience to make it smarter, easier and more enjoyable for guests.

“Some of the industry-leading tools we have developed came about because guests now expect more control in their hands through their mobile phones. Just as we get to choose our own seats on the plane now, guests likewise expect to be able to check in digitally and select their own room and view,” Welk tells The Drum.

“Digital Key, too, allows guests to use their smartphones as their room key. It is now available globally at over 4,100 properties and guests have opened more than 40 million doors and counting, and currently available in eight countries across APAC.”

He continues that it also has more than 1,800 Connected Rooms that deliver a "personalized, mobile-first room experience for our guests".

Welk points out that this innovation also extends beyond innovation in tech.

“As our strategy remains to fill gaps with the right brands, in the right location, at the right time, it was only natural that we took the opportunity to create an “accessible lifestyle” brand that is available to a broader base, beyond traditional lifestyle concepts,” he adds.

Partnerships

Brands like Tourism New Zealand have previously spoken about how important it is to work with Tencent to run targeted advertising on WeChat in China. Hilton is adopting a similar approach with the Chinese gaming giant as well, through its Hilton WeChat Mini Program.

The Mini Program provides guests with access to a series of online services, including their stay invoices, a property guide and travel information to help them explore the local destination. Hilton’s rewards program, Hilton Honours, is hosted separately on a specially-launched Mandarin language Hilton Honors app.

Hilton has also formed several partnerships with local providers of payment solutions to cater to the mobile consumption habits of Chinese travelers, where 96% of Chinese consumers were found to have used a mobile payment app over a six-month period in 2018. More than half of the people are using apps such as WeChat Pay or Alipay, daily.

“We believe that engaging the local community through sustainable partnerships should remain a critical part of the way we operate and grow,” explains Welk.

“As such, we are currently working to identify the right opportunities and develop such community partnerships and engagements for Canopy by Hilton Chengdu City Centre. For instance, in curating our retail wall with the best Chengdu has to offer, we work closely with local shops and artisans to source authentic artefacts and crafts."