A spacious lobby decorated with classy paintings and a signature scent accompanied by soothing music will likely greet visitors and customers alike at the newly-refurbished Holiday Inn at Focus Square in Beijing's Wangjing area.
The $1 billion global revamp of the hotel chain is expected to boost the company's business in the expansion of its mid-scale hotels at second- or third-tier cities in China, thanks to the rise of the middle class, Keith Barr, managing director of Inter-Continental Hotels Group (IHG) Greater China told China Daily in an interview.
While the five-star hotels in major cities in China are saturating, the mid-scale hotel market has shown its potential, creating opportunities for local and global players, travel experts said.
"The middle segment is under serviced in terms of high-quality and consistent hotel products," he said this after unveiling its global "Stay You" campaign with a photography exhibition at the Great Wall on Sunday.
"Over the next ten years, China will see a rising middle class who will want consistent experience to stay. The mid-scale hotel is very friendly to middle class family."
There are 71 Holiday Inn Hotels & Resorts and Holiday Inn Express in China and another 40 hotels will be under these brands. They are scheduled to open in the next three years with a new, contemporary look.
With 131 hotels currently in operation and an additional 146 hotels in the pipeline, Holiday Inn's parent company, IHG, has a 15 percent share of the branded hotel market in China, according to STR Global, a US-based data provider for the hotel industry.
According to STR Global, China is Holiday Inn's second largest market after the United States. IHG's hotels in China have generated an annual revenue of $1 billion on average. It reported in the first quarter a 22.2 percent growth in revenue per available room year-on-year.
The refurbishment program translates to better quality and service including a new brand identity. Over 3,000 Holiday Inn and Holiday Inn Express hotels will be refurbished by the end of this year.
"When it comes to consumers, the mid-scale market is the most dissatisfied in China," said Barr. "What Holiday Inn does is to deliver our promises and to really get all the basics right."
In addition to consistency of experiences, he said the hotel's global coverage matters to an increasing number of Chinese travelers who go abroad.
To appeal to the majority of its Chinese customers, Barr said the hotel chain is locally relevant, citing an example of Holiday Inn Express' breakfast in China that offers congee, noodles and dim sum to address local needs.
Global brands only take up five percent of the mid-scale market in China in terms of number of hotels, with majority operating under domestic brands or non-brands owners, said Gu Zhimin, deputy dean of the school of tourism management of Beijing International Studies University.
"Foreign players have an edge in consumer's recognition because of their brands and their management but they find it hard to compete in terms of cost. They may also have poorer understanding of the local market than their Chinese counterparts," she said.
