Interview: Edmond Ip, chairman, Greater China, Hilton Worldwide
26 October 2011
Hilton Worldwide’s new chairman, Greater China Edmond Hilton fills HMA in on Hilton’s expansion strategy for China, challenges for general managers, and predictions for the future.
You recently joined Hilton as chairman, Greater China. Could you tell me about your remit in your new role?
My remit is overseeing the company interest in greater China, also providing a statistical view and learning how to address the fast growth in China. An important part of the role is enhancing our relationship with owners and with the local community as well as looking at development. Finally, it involves strengthening the team and team structure to prepare for the growth over next couple of years.
Hilton has previously stated it plans to open 100 hotels in next five years in China. What is its expansion strategy?
For us at Hilton, we want to make sure our growth is sensible growth, fast but it must be quality. China is still a significant area for growth. We will focus on key cities. We are already in the big cities but I think there is the opportunity for us to build more depth. We can have three or four Hiltons, for example, in every major city. We will also look at introducing new brands into the market place as the market develops and at tier two and tier three cities. In building our growth, it is important for us to keep finding the right strategic partners as well.
You mentioned part of the strategy might be introducing new brands. A number of companies have looked at this including IHG which in February announced plans to launch a brand specific to China. Is this something Hilton is considering?
That is something we need to examine.We still have a lot of brands in our portfolio that we haven’t introduced to China yet. Before we jump into a new brand, we should fulfil our existing brands with brand introductions into China. We need to look at and learn from what we have done well, and where there is more opportunity for us to introduce our existing brands.
Which market segments do you see as offering the biggest market opportunity in China?
At the moment, the market is full of five or five plus luxury products. In the market, I believe that middle wealth in China is coming very strongly. China's growing middle class offers the biggest market opportunity because even if 10% or 20% of the population are middle class, that is still a very large number. There is also a high demand for meetings and conferences so I think the MICE segment will keep growing.We are looking at opening around 23 hotels next year. In three to four years time, Hilton should operate around 100 hotels in China.
Most if not all of the larger hotel companies are now focusing on China. What are the challenges going to be for the general managers of these hotels?
I think the problems are universal. The problem for general managers for every hotel or corporation in China is having staff poached by other hotels or other industries. We are all facing the same problem. The thing we need to do differently is look at how to better retain our people – retention is not only about money, we need to be more comprehensive looking at retention programmes. One of the key things I have found is that a good leader results in better retention so my aim is to develop our general managers to become great leaders.
You said it’s not necessarily about money. What are Chinese staff looking for?
I think you should treat your staff and pay your staff fair and well, a fair salary for their ability and performance. Chinese people are looking for growth, they are hard working, very talented and very ambitious so they are looking at what the company can offer them when they are working loyally for you. There must be a return, an opportunity for transfer promotion and learning – that is the area we will be looking at.
Hilton announced recently the launch of Hilton Huanying, its customized experience for Chinese travellers. Do you this kind of approach will be successful? Is this what Chinese travellers are looking for?
I think this is the way to go. Companies have to pay more attention to a specific market and not assume every traveller worldwide has a generic need. All the Hilton hotels have staff that speak three languages if not more typically German, Japanese, English and local language. I believe when you get more momentum that will be a successful way to go. I think this will be something you have to pay attention to in order to read the customer base.
You won the trailblazer award from HICAP in 2010 and are seen as a hospitality leader. How do you see the hospitality business in Asia changing in the next five to ten years?
In the past five to ten years, there has been an increase in regional travel. The other important thing is the explosive growth of internet, booking channels, blogs, you tube etc.
There has been an increase in wealth in Asia and in particular China so more people travelling will continue to grow. Another thing is in the past, you didn’t see that many activity-based travel experiences, but now I think activity-based travel will increase. For example, ski resorts. Travellers in the future will be much younger, much richer. I also believe there will be growth of professional management companies in this region. In the US, those companies with management expertise will franchise a brand so they can manage a hotel for other people. I think that will come in time in Asia. I believe there will be more international companies in Asia Pacific and more new brands as well; I think the market still has got room for new brands. However, with that growth there will also come a human resources problem; there will be a need for professional people in the Asia Pacific.
Finally, there was a report that came out in July 2010 that you were launching a new brand called Hua Di. What happened to that?
Hua Di was the brand I developed while at InterContinental Hotels Group. When I retired, I had an opportunity to buy that development of the brand so I owned the brand, but at the end of the day I decided to put it on the back burner for a while. But when I was offered the chairmanship at Hilton, I agreed I would not do anything on that.
