Although luxury hotels in China are still feeling the effects of the government’s anti-corruption campaign, Chinese consumers’ interest in luxury hotels is at an all-time high based on internet search results.
The new “World Luxury Index Hotels” report for 2014 by Digital Luxury Group in partnership with Ecole hôtelière de Lausanne (EHL) finds that internet searches for luxury hoteliers surged 39 percent in China this year, making it the fastest-growing region in the world. Luxury hotel searches originating from China made up 9 percent of the global total, placing China third behind the United States and the UK.
“Such a significant increase in interest for luxury hotels from China can be attributed to a few things,” says Digital Luxury Group Founder and CEO David Sadigh. “Firstly, numerous Western hotel brands are opening in second-, third-, and fourth-tier cities, building brand awareness in parts of China where wealth is increasing and overall luxury hotel awareness may be low. This could mean that—after experiencing a particular brand in their home country—Chinese tourists are now seeking out this brand when they travel abroad.”
Chinese consumers’ interest in Asian-branded hotels was demonstrated by the fact that Shangri-La was the most popular hotel brand in China this year. Chinese interest made up 49 percent of all searches for the Hong Kong-based hotel brand, pushing it to 11th place on the global list.
Digital Luxury Group General Manager Pablo Mauron explains how the hotel earned its top ranking with Chinese consumers: “Shangri-La was one of the first iconic hotels on the Bund (Pudong Side in Shanghai). Their recent opening on the Puxi side also made quite a lot of noise since it’s located in the Kerry Center, a luxury mall and offices complex that recently opened in Jing’an, the financial district of Shanghai.” Shangri-La was also the second most popular search in Taiwan and fourth most popular in France and Hong Kong.
It’s not just Chinese customers driving up Shangri-La’s popularity as it expands globally, however: China is actually the brand’s second fastest-growing source market with 35 percent growth, following Brazil with a growth rate of 38 percent.
If brands want to boost their rankings on Chinese search engines such as Baidu, they need to focus on their overall popularity with Chinese consumers. “Search rates are an indicator of the interest/desire expressed for a brand. As a consequence, the details of the tactics vary from one segment of the luxury industry to another but the overall goal is the same for everybody and relies on the right mix of marketing activities,” says Mauron, who states that these include social media, advertising, online campaigns, events, traditional PR, and more.