BEIJING - The Hong Kong-based hotelier Langham Hospitality Group (LHG) is strengthening expansion plans in China through its management expertise in the scheduled opening of 50 new hotels in the next five years, targeting the luxury to mid-end range, a top company executive said.
"China is a major market opportunity for Langham Hotels," Chief Executive Officer of LHG Brett Butcher said.
"Half of our business will be in China. Moving forward, China is really the core strength of our company's growth."
Butcher's remarks came as a result of his confidence in the robust Chinese economy. "The idea of China growing and being prosperous has just begun," he said.
At present, LHG manages four hotels in the country and expects to handle at least eight properties in the near future, after clinching management contracts from local partners. Also in the pipeline is the potential to manage a further 10 hotels, and LHG is in discussions with its local partners.
Besides China, LHG has established a presence in London, the United States and Australia.
LHG has three brands under its belt: The Langham Hotels, Langham Place Hotels, and Eaton Hotels. The Langham, considered a luxury brand, is placed selectively in the top 10 Chinese cities, to reflect its identity. Today, customers can find it in two locations in Shanghai and also in Dalian and Shenzhen.
Langham Place, a lifestyle brand, which has a scheduled opening at Beijing's International Airport, two in Guangzhou, and one in Ningbo, aims to be present in 30 to 40 cities across the country. Eaton, a mid-end brand that has the biggest number of hotels, can penetrate the second- and third-tier markets, Butcher said.
"The three brands approach will enable us to grow strongly and surely, with the right brand for the right location and for the right cities," Butcher added.
In 2010, LHG, which is the hotel division of Great Eagle Holdings, achieved a 22.4 percent increase in revenue to HK$3,269 million ($420 million). Year-on-year earnings increased 53.8 percent to HK$659.6 million.
Butcher attributed the positive performance to the group's investment in its total quality management technology - a process that ensures every member of the hotel, from housekeeper and bellboys to general manger, understands when they are successful. "We need to inspire our workforce to maintain continuous improvement," he said.
The management process will be imported to new hotels in China, when the group is tasked to manage these hotels. Butcher said it is potentially easier to establish a new working culture than changing the existing culture, where staff may find it difficult to adapt to change.
In addition to China, LHG has seen the increasing market potential along the Silk Road from the Chinese mainland to India and the Middle East.
"It represents an incredible opportunity and that is where the hospitality market will be expanding in the next 50 years," Butcher said.
