Starwood Capital-Owned Louvre Hotels Banking On JinJiang Inn
With China expected to overtake the US to become the world’s largest hotel market by 2025, many major hotel chains have continued to step up their investment in China, not only to further expansion but also to tailor properties and services to an increasingly important clientele. One month after the French chain Accor launched its customized “Mercure” brand for the China market, and coming on the heels of InterContinental’s announcement that it plans to develop its own China-only brand, this week Louvre Hotels detailed its own plans. According to a company release, Louvre — which is owned by the US-based Starwood Capital — will open 25 midscale or high-end hotels within the next five years.
Louvre, which currently operates three properties in China, plans to fuel expansion by working closely with its Chinese partner, the hospitality and tourism giant JinJiang Inns. JinJiang, which has around 800 hotels throughout China, will work together with Louvre on the new co-branded budget hotel, “Campanile & JinJiang,” a project aimed at customers both in China and in France. As Louvre chairman Pierre-Frederic Roulot told Reuters today in Paris, “We have been lagging in China where we have not reached critical size on our own but we can do it with a partner…JinJiang and its 800 hotels in China, we could benefit from that. This could be our expansion shortcut.”
Launching the new co-branded hotel both in China and Paris is smart from a branding perspective. According to the UNWTO, nearly 60 million Chinese travelers ventured overseas in 2010, and currently, France is the leading destination for EU-bound Chinese tourists. Companies in France, which leads Italy and Germany in attracting Chinese travelers — hosting over half a million per year — have been eager to leverage the draw of the country for Chinese outbound tourists by targeting them strategically. For their partnership, JinJiang and Louvre work together on 15 Campanile hotels located in the cities most often visited by Chinese travelers: Paris, Bordeaux, Lyon, Marseille and Nice. In China, the partnership will focus on 15 JinJiang hotels in the cities most frequently visited by French tourists: Shanghai, Beijing and Xi’an.
For the hotels in both countries, the focus will be on localization. Hotels in France will have Chinese-language signage, phone assistance, Chinese food and television stations, while the Chinese hotels will reciprocate with French pastries and newspapers. Though the partnership extends only to budget hotels at the moment, Louvre plans to possibly broaden this to other European countries or to its higher-end brands, such as Golden Tulip, which the company acquired in 2009.
Though Louvre expects the partnership with JinJiang to increase its standing in the China market, Roulot admitted this week that it will be tough to catch up with rival Accor. Said Roulot, “There are several possible scenarios. We can continue to develop on our own or benefit from JinJiang. If you could put the two groups together, you would have a player as large as Accor.”