BEIJING -
China's hospitality (hotels and resorts) industry
represents tremendous potential, but may face a
number of challenges, a group of chief executive
officers and industry watchers said at the 17th
China Daily CEO roundtable, held with the theme
"Hotel and Tourism Development in China". The
most-cited challenges at the roundtable included
talent recruitment and retention, inadequate
infrastructure and a lack of travel-related policy
support.
Facts and figures "I
believe that China is addressing a number of the
issues we are talking about," said Christopher
Bachran, president of Jin Jiang
International Hotel
Management Co Ltd and the honorary chairman of the
roundtable. In the mid-1980s, the international
hospitality market was brand new in China with Shanghai, Beijing and Guangzhou as
the primary locations, Bachran said.
Two
decades later, in 2004, the revenue generated by
China's tourism industry was estimated at 289.2
billion yuan (US$35.8 billion), accounting for
2.3% of the country's gross domestic product,
according to the World Travel and Tourism Council
(WTTC). In the same year, 109 million overseas
tourists came to China, an increase of 19% from
2003, and the number of Chinese travelling
overseas was estimated at 28.85 million, an
increase of 42.7%, official statistics show. The
WTTC predicts that China will become the world's
fourth-largest tourism market in the years to
come.
The Beijing Olympics in 2008 and
Shanghai's World Expo in 2010 are expected to
bring even more impetus to China's hospitality
industry, Bachran said. Given the tremendous
potential, the American Chamber of Commerce
recently formed a travel and tourism committee to
look at aspects of the market that need to be
addressed, he added.
New revenue
models, airports, human resources A common
topic of discussion was how to do more business,
particularly on weekends, said John Northen,
general manager of JW Marriott Hotel Shanghai
& Marriott Executive Apartments. "What we need
to do is to look at ways to improve existing
facilities that are available right now and
people's awareness of those," Northen said.
Another common topic of discussion was
airports, specifically delays in international
arrivals of up to two hours in getting through
customs. "I know physically there are some
challenges there, but I think still there can be
an improvement in the human aspects of the
service," Northen said.
To help the hotel
industry grow, Ralph Grippo, vice president and
area general manager of the Portman Ritz-Carlton
Shanghai, thinks it needs more people. "We need to
have enough people and the right people, because
the industry is all about people serving people,"
he said. "I would love to see a pipeline - a
vehicle to create employees for tomorrow; that is,
people who truly want to be in the hotel
business," he said.
Grippo believes these
people will help promote the hotel industry. "When
people come to Shanghai, whether for business or
pleasure or experience, if it's positive, they
will tell the world. If it's negative, they will
tell the world," he said.
Karel Hujiser,
president and CEO of Asia Pacific for GE
Infrastructure, a partner of the 2008 Beijing
Olympics, agreed the infrastructure industry
suffers similar issues. Besides the growing need
for hotel personnel, the pool of experienced
hospitality experts is diminishing, Bachran said.
The Jinjiang group plans to open 16 hotels and
inns in the next three years.
"In fact, we
are putting our heads together to try to decide
how we are going to staff those hotels," Bachran
said. "I know there are hospitality schools in
Beijing, Shanghai and Guangzhou, but I am not sure
they will be able to address the need of the
industry - the need for experienced mid-level
management, experienced housemaids, room
attendants, chefs and staff all across the area."
Compensation schemes, long working hours, staff
transfer and other issues have not been properly
addressed, he said.
Ronald Chao, a partner
with Deloitte, agreed that the people issue is one
the service industry has been struggling with.
"When I first joined Deloitte, there were only 130
people," he said. "In September we had 1,000, and
our goal is to have 2,000 staff in one or two
years." Then Chao quoted a joke by a colleague to
illustrate the lack of qualified people: "If you
want to find a lizard with three legs, you can't
find them anywhere. But if you want to find human
beings with two legs, there are plenty of them ...
We need a human capital pool that can serve our
clients at a global standard," he said.
Education system called root of the
problem But the education system seems
unable to address the shortage. Bachran said
vocational institutions for the hospitality
industry are not putting out enough students. When
asked what was missing in vocational education in
a conference held in Beijing, he said he was
worried about the practical aspect of training. "I
said you can give students the ability to learn
from the textbook, but I don't know how you put
that into the type of practical experience
employees have to go through," Bachran said.
He endorsed a practice by a university in
Guangdong province, a
three-year program with the first two years spent
in school and the last year in the field. Bachran
believes a combination of university education and
experience would better suit the real working
environment. "But they produce only 120 graduates
each year; that's not very many," he said. "We
need a lot more."
Chao, however, does not
pin his hopes on vocational schools. "Relying on
vocational schools to train the people you need is
a pipe dream," he said, adding that vocational
training is looked down upon as secondary or
inferior in China and the markets all want to get
people from the universities. "Unless you can
persuade Fudan University and Jiaotong University
to have hospitality courses, you wouldn't get the
cream of the crust," he said.
Chao said
his company's solution is to set up its own
institute. "By training them to be global
participants, we get to retain them," he said.
Deloitte has been recruiting employees from the
country's leading schools and compensating them
well. Chao said young employees are willing to
face challenges and work hard, so "we just entice
them to be global accountants." Chao said
investing in employees has paid dividends. "Unless
you invest in your people and honestly treat them
as assets, you will always be fighting in the
industry," he said. "It's only through this
investment that you will be able to catch up."
The war for top talent David
Travers, vice-chairman of International Branded
Hotels Shanghai and general manager of the
Intercontinental Pudong, agreed the lack of
qualified, experienced people is the industry's
biggest challenge.
Travers said many of
his staff leave them not for other hotels, but for
other industries, as the hospitality industry is
no longer viewed as highly as it was a generation
ago. Bachran agreed, citing a study that showed
that up to 60% of graduates from hospitality
training schools do not stay in the industry.
For Peter Alatsas, general manager of the
Westin Shanghai, one way to retain staff is to
offer competitive compensation schemes. "We have
been adjusting salaries anywhere between 15 to 20%
year-on-year for the past three years, and we will
probably continue to do that," Alatsas said.
Regional tourism in
context Shanghai lacks convention centers
compared with its Asian competitors such as
Singapore and Hong Kong, Travers said.
"Even though there are many hotels, the capacity
of those hotels is quite limited for major
regional, global conferences and minor activities
that are held on a regular basis, which are major
revenue generators," he said.
But Shanghai
is not alone in its lack of quality convention
facilities; many Chinese cities lack them, said
Paul Woodward, regional manager of the Global
Association for the Exhibition Industry in Asia
Pacific. Woodward noted there is only one
medium-sized world-class convention center in
Shanghai, located near the Oriental Pearl
Television Tower. On the other hand, China has
more exhibition facilities than Japan. Shanghai,
in particular, has five exhibition centers.
Infrastructure If the issue of
infrastructure is not tackled soon and properly,
Woodward said, the Chinese mainland will face
strong competition from smaller regional players
such as Macau. Everybody in the industry should be
looking at how the rather large facilities that
are being built in Macau will affect all of you in
terms of the flow of the Chinese domestic
tourism," he said.
Infrastructure aside,
other issues affecting the image of China, and
Shanghai in particular - such as worsening traffic
- also need government support, the participants
said. Erik Rufer, general manager of Ramada Plaza
Pudong Shanghai, pointed out the difficulty of
getting a taxi in Shanghai. "I'm grateful that
taxis are cheap. But with the rate having not been
changed for years, taxis are becoming like public
transport," he said. "We hotels will do our part,
but we need government people to do their part,
too," said Roger Fung, general manager of the
Renaissance Shanghai Pudong Hotel.
Sustainable tourism Bachran
raised the concept of 'sustainable tourism'.
"[This] is something that we all need to be aware
of," he said, "because if we don't know how to
develop sufficient and qualified talent, how to
treat tourism, how to treat hospitality, how to
treat our world and our surroundings, then I think
we will be in a difficult time 20 years from now."
