Thomas Cook China announced plans for further growth in its own-brand hotel portfolio in China with an additional two projects, including the first Asian Casa Cook.
The news came as Wyndham Hotels & Resorts reacquired exclusive rights for its Days Inn brand in China as the company looked to grow its direct franchising business in emerging markets.
Thomas Cook China, the joint venture between Thomas Cook Group and Fosun created in 2016, was to develop a Casa Cook and a Thomas Cook Sunwing Family Resort in Fosun’s developments in Lijiang in southwestern China, and Taicang near Shanghai, respectively. The hotels will be built by Fosun and operated under franchise by Thomas Cook China.
The two properties followed projects with DreamEast Group, a tourist resort development company listed in Hong Kong, for two Thomas Cook Sunwing Family Resorts, one, in Jiashan near Shanghai and the other Hengyang, in southern China.
Peter Fankhauser, Thomas Cook Group CEO, said: “By partnering with Fosun to develop two flagship new hotels that will be managed through our joint venture, we’re making the most of our relationship to give Chinese customers a holiday experience that’s very different to what’s on offer from the competition. It’s especially pleasing to be realising our long-held ambition to work with Fosun to launch own-brand hotels, which form the core of our group strategy for profitable growth, here in China.”
At Wyndham Hotels & Resorts, the company terminated the master licence agreement between itself and its master licensee for the Days Inn system in China, in line with Wyndham Hotels’ strategy to grow its direct-franchising operations in emerging markets.
The Days Inn portfolio in China consisted of more than 70 economy, midscale and upscale hotels encompassing more than 12,500 rooms. Wyndham Hotels had more than 1,400 properties and 146,000 rooms in its franchised system in its total China portfolio. China currently accounted for the largest number of Wyndham Hotel Group properties in the Asia-Pacific region, with October seeing the group announce the opening of the 500th Super 8 hotel in the country.
“We look forward to serving our Days Inn-branded properties in China, adding value to their businesses and further growing the brand across the region,” said Geoff Ballotti, president & CEO, Wyndham Hotels & Resorts.
At the group’s third-quarter results Ballotti told analysts that the company’s pipeline was up 16% in China. It had over 40,000 direct franchise rooms in the country.
Ballotti said that revpar in China had grown by 2% on the direct side, with the franchise consumer business “essentially flat”.
The company has also announced a new phase of development in Greater China, under the tagline “All-star, Multi-brands and New Model”. The end of last year saw the company appoint Leo Liu to the newly-created role of managing director for China.
Liu joined the company from Envy Fine Art China, where he served as founder & CEO. Previously, Liu was VP, development strategy with Costa Crociere in Pacific Asia and has served as AccorHotels’ managing director in China.
“We are pleased to welcome Leo to Wyndham Hotel Group and look forward to the opportunities this role creates for us in China,” said Bob Loewen, Wyndham Hotel Group’s EVP & COO. “We remain committed to development in the country, and this new role, complemented by Leo’s extensive cultural knowledge, rich hospitality experience and strong relationships, will undoubtedly accelerate growth in the dynamic and expansive country.”
January saw InterContinental Hotels Group hail its own franchise model, Franchise Plus, which gives owners extra support in the country, expanding it to cater, it said “for an evolving owner demand in the fast-developing Chinese hotel industry”.
Kent Sun, CDO, IHG Greater China, said: “As a pioneer in the hotel industry, the development of our franchise offer demonstrates our ability to move at pace, continue to innovate and react to the changing needs of the market and owners, based on our global expertise and profound China insights.”
HA Perspective [by Katherine Doggrell]: China remains an itch that the global brands want to scratch and they have been attempting all sorts of different routes. Thomas Cook has its jv – a model which, as we report elsewhere this week, has hit something of a bump at Center Parcs with the exit of HNA – while Wyndham and IHG have both found that more direct involvement was reaping its own rewards.
While the Western brands are going one way, eyes are on which China-based groups will be the first to make significant inroads overseas. Much is made of the anticipated masses of Chinese outbound travellers, but as yet there has not been a change in the demographics of these travellers to suggest that mass travel, the type which looks to the budget sector, is imminent. In the meantime, Wyndham and IHG are driving up brand recognition and AccorHotels and Huazhu have their strategic alliance.
What has not been addressed by any brand is what this outpouring will do the way these brands look once they start catering to the different demands of these travellers. Expect the franchise offering to shift again once they know.