Professionalism and corporatization of chinese hospitality industry

BIt's an honour and privilege for me to say a few words on this special occasion. This forum, attended by our respected government and tourism bureau leaders and officials, representatives of tourism and hotel associations, hotel industry's experts, leaders and professionals, is a testimony and display of the commitment shown by all concerned here today to move our industry and its professionalism one big step forward to the next milestone in the future. It exemplifies the pursuit of excellence and the fast paced development of the hotel and tourism industry in China over the last fifteen years.
Shangri-La group is fortunate to have the opportunity to participate in the rapid expansion and development of China's tourism and hotel industry in China. We invested in a joint venture and managed our first hotel in China in Hangzhou in 1984. Today in China, Shangri-La has equity investments in 17 hotels. We manage 16 hotels and we have another 4 hotels under development. We had believed firmly in the potential of tourism and hotel industry of China. Having witnessed the high growth over the last 17 years, we are even more convinced than ever with the future that lies ahead and we are totally committed to our expansion in China.
The tourism and hotel industry is one of the first to embrace the open door policy that brought phenomenal economic success to China. Because of the competition and higher standards in management and service introduced to the industry, the tourism and hotel industry is one of the first to achieve international standards and recognition in a short period of time.
In the area of training and development of professionals, since Shangri-La arrived in China in 1984, we invested millions of dollars to train and develop our PRC personnel, some of them are now holding very senior management positions with us. Some have even become expatriate themselves working in other countries.
The high standards offered by the industry are not only recognized within China, but by travellers around the world, as evidenced by the number of awards that hotels in China are receiving today. This is a remarkable achievement and did not come by chance. However, we must not stop here.
Today, our industry's biggest challenge is to bring recognition to the profession and to further improve the professional standards of our managers. If China's scientists and hi-tech professionals are qualified to compete with the best in the world, why can't hoteliers from China, a country known for hospitality, be among the world's best.
With Chinese accession to WTO and the opening up of more industries, competition for talent and qualified professionals will intensify. If we already have difficulty to attract the best brains with leadership qualities and entrepreneur spirit now, this shortage of professionals will only become critical. How can our industry sustain its growth and spearhead evolution in service concepts, management philosophy, operating technology and professional development if we don't come up with constructive solution now?
It is timely to introduce the rejuvenation of the professionalism of the industry. Only after we show recognition and accord professional status to the deserving people can we attract people with qualification and potential to join the industry. Many people underestimate the expertise required to become a hotel professional and the complexities of successful hotel operation and management. A good hotel General Manager has to be good in and be able to practice leadership, people skill, customer relation, human resources management, accounting and finance, marketing, engineering, rooms and food and beverage operation and hi-technology.
We need a standardized, nationwide, industrywide, professional development program to match the growing sophistication and progress of the industry. We need professional certification that is practical, well respected and well accepted. Only then, we can bring creditability, status and enhance the image of the professional, career hoteliers. We look forward to the leadership of our tourism bureaus, the higher academic institutions and the pioneers and senior executives from the industry like most of you here to spearhead a drive to bring recognition to tourism and hotel management as a professional industry. We must introduce measures to certify and distinguish the professional who possess both academic and management know-hows as well as leadership quality and on the job experience. The industry should not hesitate to call on non-Chinese qualified professionals who can contribute in this direction. Compared to other industries that open up later than our, we should be more advanced and active in drawing on the resources and the expertise of many professionals available today.
Second, despite being one of the first industries to open up in China, we have yet to see home-grown companies that have developed to become a truly successful chain/group within China or to become 'globalized'. I see an urgent need in the institutionalization or corporatization of hotel companies that would gradually become world class and is truly international in terms of service quality, management standards, strategic direction and outlook, but, with distinct Chinese hospitality characters and flavours, culture, concept and operating philosophy. This would naturally bring about long term advantages - economy of scales, capitalizing on the expertise, efficiency and effectiveness in the utilization of assets, funds and other resources, such as management knowledge, operational standards, marketing and reservation network, brand identity, tested and proven systems, human resources, training, purchasing, technology and etc.
Given the size of China, its population and its economy, corporatization would bring about and revolutionize finetuning of industry practices, focused human resources developments, service quality and management standards. This would enable our home-grown hotel groups/chains to compete head on in the increasingly competitive environment globally. 'Survival of the fittest' will lead to the emergence of a few brands catering to different markets with the successful ones benefiting from brand identity, brand loyalty and recognition throughout China and beyond.
As China's economic miracle has afforded many citizens to travel more frequently domestically and a greater number is starting to go overseas or 'outbound', it will be a pity that they cannot find a home-grown brand name that they are familiar with and have confidence in wherever they travel. I look forward to the day in the near future when we can choose to stay in an internationally recognized brand that originated from China in one of our overseas trips to a foreign country.
In my opinion, the biggest challenge facing the establishment of a group or chain of hotels with a distinct Chinese identity is the accomplishment of the following objectives in the shortest possible timeframe. However, it must be done in a systematic manner with clear objectives, be prepared to take calculated risk and in the spirit of enterprise start-up.
1. Creating its own business philosophy, professionalism, culture and vision.
2. Develop and maintain a distinct operating concept with Chinese characteristics, be unique, and with a service philosophy that capitalizes on Chinese hospitality.
3. Establish a complete, tested and proven, practical and formalized set of operating standards and systems. Reinforced by advanced administration and manpower concepts, policies and procedures.
4. Nurture and train a pioneer team of executives with management qualification, practice experience, leadership qualities, foresight and vision. Encourage this team to blossom.
5. Concentrate your effort in building a brand identify and focus on maintaining the positioning and image.
6. Define clearly your clientele and customer profile, thoroughly understand your market intelligence, develop medium term marketing strategies and short term tactics.
The fast pace world economy of today, with everyday events unfolding and changing the business climate and environment, planning too far ahead is neither wise nor prudent. It also reduces your ability to stage a swift response.
7. Identity and seek strategic alliances or partnerships, whether in developments, investments, marketing or operation, to achieve both 'win-win' and economy of scale.
In this respect, the group with the aspiration and ambition to establish credibility and create a name for themselves must move now and quickly. With competition intensifying, the task will only get tougher.
I know over the next two days, many challenging issues will be discussed and many sound recommendations would emerge. As this forum is the first of this nature, I am certain that our industry will benefit from the wisdom of this gathering of experts and professionals.
I wish the Forum much success.
I will be happy to answer any question you may have.