Hilton Worldwide has ambitious plans to grow to 300 hotels in Asia Pacific over the next 5 - 6 years. Martin Rinck, Hilton’s President of the Asia Pacific region, talks to Breaking Travel News about Hilton’s pipeline and just how the brand continues to stay ahead of the game with innovative products and services.
Breaking Travel News: In what ways has Hilton Worldwide been impacted by the economic recession? For example, investment, growth, occupancy, product innovation, cost cutting etc.
Martin Rinck: The Asia Pacific market continues to represent enormous growth opportunities for Hilton Worldwide, thanks to the rapid and sustained increase in domestic and international travel.
According to the World Bank, a high proportion of the travellers departing from Asia are travelling within the Asia Pacific region and by 2020, China is expected to attract more international visitors than France, which is currently the most visited country on earth. In 2011, 23 percent of all international visitors came to Asia Pacific with a growth rate of 13 percent per annum, double that of Europe!
Despite the economic slowdown that has been more prevalent in other parts of the world, the Asia Pacific region has been somewhat less affected. In fact, the World Travel & Tourism Council (WTTC) had forecasted early this year that despite growth prospects for travel and tourism in 2012 softening as a result of weaker macroeconomic outlooks, notably within Europe, the overall outlook is still one of positive GDP growth and continued strong growth is expected for a number of countries including China, India, Japan, Latin America, the Middle East and Africa.
In Asia Pacific, China’s GDP growth forecast for 2012 remains relatively unchanged at a strong 8.2% and Chinese demand is expected to support strong growth throughout the Asia Pacific region. Japan’s rebound from last March’s earthquake/tsunami has also been very positive, with a full recovery likely by mid 2012.
The hospitality industry in the Asia Pacific region is inherently dynamic and riding on the factors mentioned above, coupled with a rising middle class in countries such as China and India, we remain very confident in the region’s long-term potential.
BTN: Despite these extreme economic challenges, Hilton has announced ambitious plans to grow to 300 hotels in Asia Pacific over the next 5 - 6 years. Which international / emerging markets are you targeting to fill these new hotels?
MR: While we continue to welcome a large number of international travellers to our hotels each year, we are also witnessing a strong growth in domestic travellers within the Asia Pacific region, especially from China.
Referencing figures from the World Bank, in 2011 over 60 million Chinese travelled internationally compared to 40 million in 2007. Growth in international tourism departures from India has also increased from just under 10 million in 2007 to over 14 million in 2011, while Japan and South Korea boast well over 10 million international departures of their citizens and this trend is rapidly spreading across other parts of Asia. Thanks to the high Australian dollar, 7.5 million Australians travelled internationally in 2011, representing a third of the population.
Riding on the fact that China domestic travel numbers far exceed their international travel and the expectation that China’s business travel spending will grow by 6.5 percent annually to 2013, compared to the United States’ rate of 0.3 percent per year over the next five years, we view Chinese travellers as a huge potential target. As a result of the above, we have fine-tuned our portfolio of strong brands in such a way, that they are relevant to the local market demands and satisfy the needs of the domestic customer.
Japan has also witnessed a strong recovery in visitor numbers from China, representing a 39.6 percent increase year-on-year in January. Thanks to the rush of low cost carriers from Asia entering Japan from Southeast Asia, China and Korea, there are multiple opportunities for the industry as a whole to leverage on this growth.
Hilton Worldwide has a presence in 16 different countries across Asia Pacific, with more than 88 hotels currently open and nearly 140 more in the pipeline. Most of our developments are in the key markets of China and India, which are both seeing a proliferation of the middle-class (which has fuelled the appetite for travel), improved transport infrastructure linking key cities and government support of the sector.
As such, we are well placed to attract the increasing number of travellers from Asia Pacific who are choosing to travel within the region.
BTN: What are the key differentiating factors that Hilton will continue to use to attract new and loyal guests to the hotels and resorts?
MR: Having team members who are passionate and driven is an important differentiating factor in the increasingly competitive landscape. It is and will continue to be our challenge to attract and nurture the right people with the drive and dedication to grow and develop within our fast growing organization.
In addition, we have also continuously kept ourselves ahead of the competition by introducing innovative product and service offerings catered to meet the evolving needs of today’s global travellers.
Hilton HHonors, our award-winning guest-loyalty program for Hilton Worldwide’s 10 distinct hotel brands, has more than 30 million members. HHonors members can use points to purchase unique experience rewards, merchandise and vacation packages, make charitable contributions, and more. HHonors is also the only guest-loyalty program to offer ‘Points & Miles’ and ‘No Blackout Dates’ at more than 3,800 hotels worldwide. Just last year, we re-launched HHonors in China and invested over US$2 million into the program’s marketing and advertising in China to strengthen connections with our loyal customers, resulting in an 83 percent year-on-year increase in our membership base.
Our Huanying program, designed to accommodate the needs of the Chinese international travelers, offers a set of amenity and service standards uniquely designed to make the growing number of Chinese outbound travelers feel at home abroad.
In the culinary field and with a goal to open more than 300 restaurants in Asia Pacific in the next three years, we remain committed to provide our hotels with great concepts that are unique to their respective regions and that offer menu options that will appeal to their repeat customer base, all developed by our great team of Food & Beverage experts.
Over and above this and aimed at seeking restaurateurs that meet the criteria and looking to partner us as we continue our global expansion, we launched Hiltonrestaurantconcepts.com to help match hotels and hotel owners with “tried & tested” restaurant concepts. Currently there are 18 approved concepts available on the website, and we plan to have 50 by year end.
Last year, we also introduced eforea: spa at Hilton, our global spa concept that is poised to be one of the world’s fastest growing spa brands, with significant growth in Asia Pacific. Featuring an exclusive menu of treatment journeys and innovative design elements, all providing a turnkey spa solution that owners can easily implement and customize, we have pulled the best elements and practices globally to create a unique concept for today’s savvy travelers.
BTN: How are the new Asia Pacific hotel developments going? How many projects do you currently have in the pipeline? Are you on track with these?
MR: Asia Pacific is the most important market outside of the U.S. for Hilton Worldwide and we have concrete plans to extend and deepen our presence here.
Hilton Worldwide is one of the fastest growing hotel companies in terms of deals globally and we have an extremely strong development pipeline in Asia. As mentioned earlier, we have a presence in 16 different countries across Asia Pacific, with more than 88 hotels currently open and nearly 140 more in the pipeline. Our pipeline of new hotels will triple our trading footprint in Asia over the next several years.
In the first quarter of 2012, we signed multiple new management agreements, including some “new brand launches” in existing markets. These include introducing DoubleTree by Hilton properties to Indonesia and Japan as well as the first Waldorf Astoria in Southeast Asia to Thailand.
BTN: In order to achieve this growth, you have announced plans to double your work force in Asia Pacific region, how will you facilitate this?
M: We will continue to nurture a larger pool of industry talent for our expansion needs and to support the development of the industry. Grooming best in class human capital is a top priority for our organization. Additionally, we are expanding our network of strategic alliances with educational institutions and new partnerships have been forged with Les Roches Jin Jiang International Hotel Management College (Shanghai), TUC-FIU (Tianjin) and Shunde Polytechnic (Guangdong) and Taylor’s University in Malaysia.
BTN: To what extent is it a priority for Hilton to become an employer of choice in the region? What types of initiatives do you have in place to achieve this? What type of training do you have in place?
MR: Besides attracting external talent to join us, Hilton Worldwide has built a strong reputation as an employer of choice in the hospitality industry and we continue to invest heavily in developing and retaining talent internally through targeted training programmes for every level within the organization, as well as international career development programs and professional training across functions. Training staff to deliver best-in-class service is core to our success and critical to achieving our growth ambitions.
Hilton Worldwide University, for example, is our award-winning e-learning facility available to all our employees across the world. Through this, we are able to offer tailored learning courses; from management skills to language classes, to help our employees further develop their career within the organization. Hilton Worldwide University delivers over 300 leadership courses and over 2,000 training courses. To date, there are over 60,000 registered users and over five million training hours have been delivered last year alone.
We are also committed to helping younger talent develop into more senior roles within a shorter timeframe through special leadership programs that are targeted at Hotel Department Heads and General Managers. This includes working closely with top educational institutions (Cornell, IMD, Harvard) to provide more educational opportunities for our team members.
BTN: What are your predictions for travel and tourism in Asia Pacific region over the next five years?
MR: Looking ahead, we see strong long-term growth momentum in this region driven mainly by China and India.
Economic development in China coupled with a rapidly growing population is resulting in the proliferation of a middle class – leading to higher income levels, which will support a greater appetite for travel, especially domestically and inter-regionally. This will be further boosted by the government’s strategic long-term focus on promoting domestic consumption.
In terms of international travel, the number of visitors to China will see a steady increase, and by 2020 China is expected to attract more international visitors than France.
India will also continue to be one of the powerhouses in Asia Pacific, simply because demand outstrips supply as the economy continues to grow, albeit at a slower pace. International tourist arrivals in India are expected to grow significantly and domestic travel within India is expected to be one of the key business drivers.
Key strategic gateway cities such as Hong Kong and Singapore, where corporate and MICE-related travel are typically key business drivers, will also continue to remain strong markets.
BTN: What is your vision for Hilton Worldwide?
MR: Our company vision is to be the preeminent global hospitality company – the first choice for guests, team members and owners alike. The Asia Pacific Team is working tirelessly to achieve this vision!