The hotel industry has seen some rapid growth as well as changing customer behavior in recent years in China. With a market value of around $44 billion and over 2.5 million hotel rooms, some analysts have commented that the saturation point must be approaching soon. However, a recent report by the analyst firm AT Kearney suggests that there is a strong argument for at least another decade of growth.
This changing customer behavior may well mean that the market grows faster in some areas than others:
All these changes point to the importance of the customer experience in the hotel booking process. Most Chinese customers use online travel sites to gather information and research on hotels, but it’s still very common for the customer to use the main website of their chosen hotel to place the booking. Around half of the customers will use the travel site for research, and then move to the hotel website to book a reservation.
This means that a smooth experience is closely tied to brand loyalty in China. A good customer experience not only locks the customer into a relationship with a brand that they enjoy using, but these customers will also advocate for the brand.
AT Kearney believes that the Chinese hotel industry has a capacity to grow and offer 6.3 million rooms plus an industry revenue of over $100 billion. However, it’s going to be very important to understand where the growth will happen, and how. The biggest regional beneficiaries will be second and third-tier cities due to the increasing need for space in these locations. Changing customer expectations will also shape how the industry develops—smart hotel companies will focus heavily on the customer experience because this will set them apart in such a fast-paced marketplace.
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