South China's Hainan province is shaping up to be a new holiday hub in Asia – but could European consumers and sunseekers soon be flocking to the country's "tourism project" on the island? That's the hope of European hotels group Accor, which has invested heavily there.
Patrick Mendes, the company's chief commercial officer, spoke to CGTN Europe about how France views the market potential of China and if the Hainan Free Trade Zone would offer new opportunities for bilateral and regional economic prosperity.
What is Accor's strategy towards China?
Patrick Mendes (PM): China is a key market for us for two reasons. First, it is a big emerging market. We're talking about 200 million travelers. Of course, when travel resumes, we consider China or Chinese travelers for all Accor and the whole group as an emerging market. Essentially, for Southeast Asia, for Thailand, Vietnam, Singapore, we have a lot of hotels there, we are a big leader in Asia-Pacific, so we consider China as an emerging market that's key for the group.
Accor's Chief Commercial Officer Patrick Mendes joined the company in 2005 and spoke to CGTN Europe about providing a bespoke service for Chinese travelers. /Ross Cullen/CGTN Europe
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Tell us how you hope to reach Chinese clients?
PM: That's number one. And, also for Paris, for Europe in general, it's a great market. And also for our organization in China, we have today a big development in China, everywhere in all the segments, from economy to luxury, premium and lifestyle. So we are developing a lot.
We have a big partnership and a big team over there, we have a new CEO who has been appointed three years ago, so it's a big region for us also as an operation. Today, we have eight hubs in our organization. One of the hubs is mainland China plus Hong Kong, so greater China. It represents between 6 to 8 percent of our total revenue in the group. So an emerging market is the first reason and then an operation in China, which is growing every day.
How do you see the business environment for foreign companies trying to invest in the Chinese market?
PM: It's difficult for international travelers, even though we are seeing a lot of investment there but for us. We see China as a big and strong domestic market, strong for corporates, so a lot of corporate travel and strong for leisure. If you look at the first week of May, this week of bank holidays in China - it was amazing!
We had at the beginning only really domestic travel at one or two hours from the big cities, but now we are seeing long-haul in China, so people are moving from province to province and bringing a lot of domestic leisure travel. It's a really big market for us, domestically.
Have you had to adapt to the specific challenges of operating in that part of the world?
PM: Yes, we needed to adapt our operation. Chinese guests are a bit different in the way they behave. You cannot transfer everything you are doing in the UK, U.S. or France to China, you need to adapt to the digital way of working. So WeChat is a good example. We have developed a lot of digital functionalities with apps and websites. We now have a mini-app for WeChat for Accor Hotels, so you can go directly on your app and book any Accor hotels in China or outside China.
We are adapting our tools and trying to decentralize more. So we have a governance that is a mix of some central branding, central programs that we develop in Paris with the cooperation of the Chinese team and we have some topics that are totally decentralized, essentially in digital tech, IT, where we need to decentralize to adapt to the local communities.
How do you see the opportunities for the Hainan project?
PM: We have many hotels already open in Sanya and in Haiku, we have several Ibisis, Novotel, Fairmont, and a big project, more than 500 rooms in Sanya, which will be one of the ones we will have in Hainan. But for us, yes, it's definitely a big destination for both business and leisure and it will bring a lot of Chinese.
It's going to be a new Hong Kong, Macau, Singapore, so it's something very big that we are looking at seriously. We are quite amazed at the size and the quality of the project of Hainan so that's why we are looking at it seriously and all our partners are there and we are trying to put all our brands there, so today we have more than eight brands present physically in Hainan and we want to grow and have more of both leisure and business properties in operation in this region.