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The Case Study: Competing in Asia

The Financial Times

“ The Case Study: Competing in Asia ”

By Fu Jia and Morgen Witzel

http://www.ft.com/intl/cms/s/0/a054cde6-c445-11e1-9c1e-00144feabdc0.html#axzz2DuYWy3P4

This article published in the Financial Times explains how every hospitality brand, which wants to establish in China, will face different challenges and will have to be innovative to face them.
The authors of this article focus on the case of Fairmont, a famous company which has hotels all around the world, and especially three in China. Among them there is Yangcheng Lake Hotel in Kunshan, a very popular place for Shanghainese tourists. This hotel is facing the competition of nineteen other luxury hotels at the resort, all of them being Chinese. 

For the Fairmont Hotel the question was : how to make our brand distinctive to become more attractive to customers?

The answer of Fairmont Hotel was to create its own farm producing fresh and organic food, to sell it in their restaurants and even in the region. The company bases this strategy on a good knowledge of the Chinese culture: they know how food is important in the Chinese culture and how they feel worried about questions like groundwater pollution or food poisoning. Thus, as the population feels more and more concerned with the issue of pollution and its repercussion on health through food, Fairmont seems more reliable than its competitors.

Fairmont is not the only international group, which made an effort to become closer to its Chinese clients. For instance, both InterContinental Hotel Group and Accor launched new brands, shaped especially for the Chinese market (Hualuxe and Meijue). All these groups adopted a differentiation strategy. But what I found interesting in the case of Fairmont Hotel is how environmental issues became a core element of its marketing strategy.

The aim of the company in the first place was not to have an ecological policy. They wanted to improve their image towards the Chinese tourists and to be different from their competitors. Ecology was only a rational way for them to do it. Here Fairmont is proving something: for a very long time it was more rational from an individual point of view to act non ecologically (more productivity, less expenses…) but now the most rational behavior is to respect the environment. We have a win-win situation here: the government of the region which receives support to clean water and land, the local population which can purchase the organic food and find a job in the farm, the consumers who can be sure of the safety of the food, and finally the hotel which improved its image.

This way of thinking globally and of including environment in the hotel policy (and to benefit from it) should generalize in the upcoming years as the issue is becoming more important for the clientele. Hospitality brands will thus have to think in more and more innovative ways to develop it. Fairmont started by creating its own farm. Maybe next step for hotels will be to have their own recycling system to deal with the hotel wastes, or to create their own NGO to develop local projects. It makes me optimistic about the future: environmental policy may become one of the main criteria used by hotels to differentiate themselves. Moreover hotels might even become actors supporting and stimulating governments when they do not have the means or the will to act in favor of protecting the environment.