Global Economics

Ritz-Carlton's China Challenges


The luxury hotel chain is well established in China and is expanding fast to new cities. It looks forward to a big boost from the Olympics

Simon Cooper is president and chief operating officer of Ritz-Carlton Hotel. Based in Chevy Chase, Md., it operates 70 hostelries in 30 countries. Cooper recently visited the southern Chinese city of Guangzhou for the opening of the hotelier's newest China property. Plans call for opening hotels in Shenzhen and the island resort town of Sanya this year, and properties in Macao and Shanghai's Pudong district over the next year-plus. Already the luxury brand has two hotels in Beijing and one in Shanghai. Dexter Roberts, BusinessWeek's Asia news editor and China bureau chief, sat down with him in the Guangzhou Ritz-Carlton recently to discuss the luxury hotelier's plans for China and for the Olympics.

What's your view of the China market?

China is the big growth story in Asia. It's a very meaningful slice of our growth. It obviously has a big population, and its wealth and knowledge are growing at a tremendous rate. And China provides not only a domestic market for our hotels here. We are also seeing an outbound market of Chinese staying in Ritz-Carlton hotels elsewhere in the world.

What is driving growth here?

It's the accumulation of wealth, the tremendous growth in manufacturing. And the development of tourism and infrastructure is of course important. Look at Guangzhou: look at the sheer size of its new convention center. Now they are building a new library and a new museum—that kind of infrastructure adds to the development of a place as a destination. They have an extremely good airport here. When we decide where to build, we look at the number of international flights flying into a location. We look at the number of consul generals in a city.

What's the biggest challenge for the company in China?

Always delivering consistency of service. What people want from a Ritz-Carlton hotel in New York and here is the same.

What is Ritz-Carlton doing to prepare for the Olympics in Beijing?

We don't really do things differently for an Olympics. Our customers during the Olympics are generally corporations that are entertaining customers. They will be rotating people through for the three weeks around the Games. Given the kind of guests we have, we always have very robust security in our hotels. If we have press, we have to be mindful of their deadlines. Maybe we will serve a 24-hour buffet for them.

What can the Olympics do to benefit a country's economy?

Beijing has a real opportunity. Take the example of Barcelona. They used the Olympics to reposition themselves. Pre-Olympics, Barcelona was just a nice city—but it was like a lot of other nice cities around the world. Barcelona did an extremely good job of using the Olympics as a springboard to becoming a world destination. The Games provide an emotional legacy for a country. And they provide an infrastructure legacy that a country can build on, too. For us, the Olympics is a really nice event along the way as we build our hotels here. It's helpful of course. It helps the destination and so can help us.


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