Hilton to maintain breakneck China expansion pace, targets 100 new hotels per year

Global hotel chain operator Hilton is bullish over the growth potential of mainland China’s leisure travel market and plans to maintain its fast-paced expansion in the country, with a focus on niche brands.

The company, which owns brands like Conrad and Waldorf Astoria, aims to add at least 100 new hotels in China annually over the next few years to cater to increasing travel demand, Qian Jin, president of Hilton Greater China and Mongolia, said in an interview.

“Niche brands are in high demand to offer personalised services to tourists,” he said. “We have to fine-tune those brands as we move to some specific destinations to capture the growth opportunities.”

Hilton, which opened its first hotel on the mainland in 1988, embarked on a programme of fast track growth in the world’s second-largest economy in 2019, racing ahead of its international rivals such as InterContinental and Marriott in terms of new openings.

The operator’s portfolio now has 700 hotels across mainland China, Hong Kong, Taiwan and Macau, an increase of 367 per cent compared with the end of 2018.

Aside from its luxury brands, it also manages a variety of hotels under brands such as Canopy and DoubleTree in China to meet different needs and preferences.

The group’s mainland operations span 10 brands and 240 destinations.

On August 16, Hilton announced the opening of Conrad Chongqing as its 700th hotel in China. It is also the hospitality giant’s 15th Conrad hotel in the country.

Alan Watts, president of Hilton Asia-Pacific, said in a statement after the company reached the new milestone that one in every three hotel rooms under construction in mainland China bears a Hilton flag.

“We continue to lead the industry as the fastest-growing international hotel company in China and are better positioned than ever to extend our signature hospitality to even more destinations in the country,” he said.

Qian said it is quite likely that the US hospitality group could open a new hotel every two days on the mainland in the future.

“We have been actively studying consumers’ habits and working hard to adapt to the changes in consumer behaviours in a swift manner,” Qian said. “Chinese tourists are more used to digitalised services, so we strengthened our digital team to reinforce our growth strategy.”

In the first half of 2024, Hilton expanded its presence into 25 new mainland locations, including Changshu in East China’s Jiangsu province and Guilin, a well-known tourist destination in southwestern China’s Guangxi autonomous region.

Big-name international brands from retailers to hotels to fast-food operators are increasingly expanding into untapped parts of the mainland as they embark on a low-price strategy to appeal to vast numbers of less affluent customers amid a slow economy.

Mainland-based hotels can generate an annualised return of about 2 per cent for investors, which can be enlarged with the right market positioning and sound management, JLL said in a report in May.

Zhou Tao, head of hotels and hospitality at JLL in China, said the return rate can be boosted to 4 per cent if management costs are efficiently controlled with value-for-money hospitality services offered to clients.

China’s hotel market is expected to grow at an annualised pace of 8.9 per cent, topping US$166 billion by 2028, thanks to increasing tourism, a growing middle class, and government initiatives to promote the industry, business advisory firm Renub Research said in a report in September.