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Chinese hotels in desperate need of strategies to compete with Western hotel chains

06/28/2020| 3:45:15 PM|

It is vital for domestic Chinese hotels to detect and eliminate gaps in hardware and/or service quality.

As China and its hotel industry gain prominence on the global stage, more and more foreign investors are turning their attention to this huge and extremely promising market, Chinese hotels are in desperate need of strategies to compete with the high-quality service and facilities offered by Western hotel chains.

Thanks to a pioneering study by Dr Markus Schuckert, Professor Rob Law of the School of Hotel and Tourism Management (SHTM) at The Hong Kong Polytechnic University and their co-authors, they now have the perfect solution. Based on painstaking analysis of a huge new dataset of TripAdvisor reviews, the researchers show Chinese hotel managers exactly how their hotels are falling short of international standards, and what they can do to close the gap.

China’s tourism industry is flourishing. The researchers note that the last few decades have seen not only rocketing demand, with inbound tourism increasing by 75 times since 1978, but also rapid growth in supply. In 2013, there were over 13,000 star-rated hotels in China, compared with fewer than 3,000 in 1994, and this figure continues to rise. Yet, domestic hotel companies are not the only beneficiaries. As the tourism industry becomes an ever more important driver of economic growth, its success spells good news for China as a whole.

However, the researchers are careful to point out that this phenomenal progress inevitably brings challenges. Chinese hotels still lag behind those in developed countries in the West. “Since the 1980s”, they write, “the Chinese hospitality industry has been suffering from overcapacity, quality issues, low efficiency and decreasing operational scale”.

“It is vital”, stress the researchers, “for domestic Chinese hotels to detect and eliminate gaps in hardware and/or service quality between themselves and foreign competitors”. Only then will they be equipped to meet the rising expectations of local consumers as well as foreign tourists.

To meet the standards offered by their foreign competitors, domestic hotel managers should take action to identify and meet the needs of their guests by carefully considering and responding to online feedback. The more detailed their responses, the better. But making guests happy is not the only reason for domestic hotels to adopt more positive management response strategies, suggest the researchers. “Managers can also learn a lot about how to further improve their services from the complaints and suggestions they receive.”

This ground-breaking study shows Chinese hotel brands precisely where they fall short of international standards, and offers the perfect solution. As the researchers note, “management response is a fact-based, cost-saving, and more effective method than allocating resources to improve product and quality standards without listening to consumers’ needs”. Given the rapid growth of China’s tourism industry as a major contributor to the economy, closing the service-quality gap between domestic and international hotel chains will ultimately enhance China’s overall economic development.

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TAGS: hotel industry | inbound tourism | service-quality
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