On 2 July 2021, STR held the second Chinese webinar in 2021. This transcript was initially in Chinese and translated into English.
We were fortunate to invite three senior guests to discuss the popular parent-child topics in the second-round table discussion of the webinar and talk about the challenges and opportunities of urban hotels facing summer months.
Below, you can read the insights of hotel experts and the suggestions of parent-child research experts and look forward to the second summer vacation since the pandemic outbreak, optimize vacation earnings, and better prepare for the second half of 2021.
Since the pandemic, the trend of hotel performance has shown the unlimited potential of the leisure vacation market on weekends and holidays. Leisure and vacation guests' preference for luxury and Upper Upscale hotels, as well as their emphasis on comfort and novel experiences. Undoubtedly, how to attract leisure vacation guests to fill up the vacant rooms on weekends and optimize the hotel market segmentation is a challenge for many hoteliers. If they can successfully capture the leisure vacation guests on the weekend, the hotel’s RevPAR and comprehensive competitiveness can be improved more easily.
STR compiled hotel performance during summer vacation in 2017-2019. The data shows that hotels were full in July and August.
We are very honoured to have invited three senior guests: Li Jing, General Manager of Sheraton Grand Beijing Dongcheng Hotel, Ms. Ma Weihua, General Manager of Hilton Jinan South Hotel & Residences; and a special guest, and Mr. Shen Shiwei, the founder of Beijing Tongchengzhang Network Technology Co., Ltd.
The two hotel general managers discussed if city hotels, which are mainly business hotels, could be able to set up a parent-child market and how to successfully attract parents and their children. Mr. Shen, on the other hand, who has successfully held in the past 5 years many parent-child trips as a pro-child living movement expert discussed his opinion on parent-child hotels and what hoteliers can learn from the insights of people “outside the industry”.
Question 1
Christine Liu: How feasible is it for city hotels to be parent-child friendly? Opportunities outweigh challenges or vice versa?
Ma Weihua: It is very necessary for city business hotels to be parent-child friendly. This is already a trend. From the analysis of STR in the first half of 2021, parent-child demand contributes a lot to the hotel revenue. As each hotel’s situation is different, the feasibility is also different, so you must consider your own hardware and investment level. Most international groups have also realized the importance of the parent-child demand. In the case of our hotel, the group has also specially formed a team to help the hotel regarding parent-child demand. Our hotel is in Shandong, the birthplace of Qilu culture. Leisure trips will also pay more attention to cultural experience, which is quite different from normal island trips. Therefore, most of what we do are experiential and educational courses, and the investment in hardware is not very high. In general, the opportunities for urban hotels in parent-child demand still outweigh the challenges.
Question 2
Christine Liu: For parent-child travel, which one is more important compared to hotel hardware and software?
Shen Shiwei: Business hotels are generally located in urban areas, with good locations and good hardware. For the parent-child research group, most of us will be equipped with our own teachers, who can make up for the lack of software, so the requirements for software are not high, mainly depending on the hardware facilities of the hotel. Especially after returning to the urban area from scenic hotels with inadequate hardware, I hope that the hardware of urban hotels will be more complete. Of course, if the hotel has “software” suitable for parent-child entertainment and education experience, it will be icing on the cake.
If the hotel must invest in some software to make up for the lack of hardware, it is recommended to set up some distinctive courses. The hotel can cooperate with local parent-child agencies to do some activities together. For example, in Beijing, you can take your children to experience the making of sugar or experience traditional folk customs. According to my observation, the courses set by most hotels lack characteristics and appeal. And when we take our children out, we hope that the children can experience the city’s characteristic culture.
Question 3
Christine Liu: In the context of rising and falling consumption, do you think parents’ consumption for children’s outings has upgraded? What are the concerns when choosing a hotel for a family travel?
Shen Shiwei: The consumption of parents must have been upgraded. Now parents are willing to spend more money to let children have a richer experience and learn some knowledge that is not normally learned in class. For hotels, especially international hotels, there may be children from many countries. We can organize them to carry out activities together, make new friends, give children and parents different surprises, and make parents feel that the money spent is has value.
Parents must still care about the hotel's hardware the most and must choose the safest and most reliable hotel. In addition, I also care about whether this hotel allows children to experience local folklore and culture. For example, the hutongs in Beijing and the lanes in Shanghai. But for a five-star hotel, if you want to attract parents with the highlights of a boutique homestay, it is still relatively difficult, and you need to work harder to discover its own characteristics.
Li Jing: For me, when choosing a hotel for a family trip, branded hotels must be the first choice. In terms of safety, you can avoid worries about the future. Later, I will refer to the hotel’s online reviews and focus on these aspects: one is the richness of the hotel’s parent-child activities, the other is the convenience of parent-child facilities, and the third is whether there will be activities in the hotel for children to participate in the whole process, so that I can have time to rest. Many mothers have this feeling that taking their children out for a day is much harder than going to work. I will pay special attention to whether this hotel can help me accompany my child, take her to play safely and happily, so that parents can really relax for a while. This is my ideal vacation mode, which not only takes care of the children, but also allows myself to rest.
Question 4:
Christine Liu: How to reconcile the contradiction between parent-child travel and business travel needs in city hotels, and how to balance liveliness and cleanliness?
Li Jing: There is indeed a conflict between parent-child tourists and business guests. One day during the 1 May holiday, our hotel had nearly 150 children. At that time, a regular resident told me that he felt that the hotel was too lively and that when making a phone call at breakfast, he had to use a very loud voice. I understand it very well, but the guest said that he understood it very well because as a hotel, the market needs to be diversified, and the kids have explained that we have done a good job in market segmentation. I am very touched, which also shows that everyone is very aware of the explosive power of the parent-child demand. But for hotel operators, this is also a test: how to maintain the quietness of business guests and ensure the continuous release of the energy of small guests.
Some business guests who have stayed in hotels will bring their children over during the holidays. We noticed that these guests will not dine in the executive lounge as usual but take their children to ADD (all-day dining restaurant), which is larger and has a wider variety of meals. We planned in advance to guide families with children to one area, let the children dine together, give them a better atmosphere, and separate business guests from parent-child tourists. Later, we saw that in the comments, guests gradually expressed their recognition of our parent-child atmosphere, which is a very good thing. Guests recognize that our products are becoming more and more abundant, and that the hotel is also a good choice during weekends and holidays.
Ma Weihua: I agree with what Mr. Li mentioned. We have also set up some diversion measures in the all-day dining restaurant. In addition, most of the executive lounges in general hotels are specially prepared for business guests, but when we do upsell, guests with children will also use the executive lounge because of the purchase of high-level rooms. This raises a question: the needs of parent-child travel guests and business guests are quite different, and it is not easy to divide and divert the limited space of the executive lounge. Therefore, we have set up a travel ambassador to pay attention to and accompany the children in the executive lounge during the happy hour, to maintain the order of the children to a certain extent. Summer vacation prospered with business. From an operational perspective, the general manager of every hotel needs to pay attention to how to balance business guests with family tourists.
Question 5:
Christine Liu: The performance of hotels in the first half of 2021 was good. What do you think of the second half of 2021?
Shen Shiwei: From our perspective, the first half of 2021 was much better than the first half of 2019. But I am not particularly optimistic about the second half of the year. The pandemic is not very stable now, and everyone is also anxious about the mutant strains. Excluding the summer vacation, there are only two holidays left in the second half of the year, November and Mid-Autumn Festival, which should be the same or slightly lower than 2019. I am more optimistic about the first half of 2022. Judging from the data just now, 1.2 billion people have been vaccinated, and herd immunity is basically about to be formed, so the first half of 2022 and the summer vacation should be more worth looking forward to.
Li Jing: I am cautious and optimistic. Optimistic because my hotel is in Beijing, and there are two hot events in Beijing in the second half of the year. The first thing is that Universal Studios is about to open at the end of the summer or the second half of the year, which should give the market a boost. The second thing is that many activities related to the Winter Olympics will be in full swing in late January next year. We have also seen many parents take their children to join the ice and snow activities, which is bound to be good for the hotel. However, Mr. Shen also mentioned the impact of the pandemic just now. Especially when we are in the north, the virus will be more active when it is cold. So, I added the attributive cautious before optimism.
Ma Weihua: I very much agree with the term Ms. Jing used. The impact of the pandemic will not subside in a short time, and it will take time for the economy to recover. From the perspective of tourism, consumption in July and August should still be optimistic. However, the volatility of the pandemic and the volatility of Internet celebrity hotspots have also increased the difficulty of market forecasts to some extent. For second-tier cities, especially traditional provincial capitals like Jinan that are non-coastal or hot destinations, I still need to maintain a cautious and positive attitude. The demand for leisure parent-child and traditional business markets is recovering, but we should not be blindly optimistic. The market will not be a short-term blowout like during Labor Day holiday. Hot tourist routes and summer vacations in island cities should still be something to look forward to.
The summer vacation is a very challenging period for hotels, especially for traditional urban business hotels. If you carefully dig out some details on the product and design a special experience product, the hotel’s performance will have a chance to do better; but if you just wait passively, thinking that it will naturally get better with the coming of summer, it depends on the hotel. Are you lucky enough?
Urban hotels have gradually become a trend in parent-child demand. When the hotel’s location and hardware conditions are relatively difficult to change, how to make good use of the city label and its own advantages, seize the summer parent-child market, and balance parent-child travel with business guests, is a question that hoteliers must think about.
Opportunities and challenges coexist. We hope that this dialogue with hotel experts and parent-child research experts will give you some inspiration, let us look forward to this summer vacation in 2021!