Chengdu Leads in Luxury Among China’s ‘Tier 1.5’ Cities

Beijing, Shanghai, and Guangzhou have long been seen as mainland China's top luxury hotspots, but they have an emerging rival in their midst as the southwestern city of Chengdu in China’s Sichuan province attracts a growing number of brands on the road to first-tier status. “I think in the near future, it’s going to become a first-tier city—definitely.” says Vito Romeo, the general manager of the Ritz-Carlton Chengdu, one of the first international five-star hotels to land in the city. “It’s started to become more sophisticated, and also you have many companies now putting their base here.” Defined as “Tier 1.5” by commercial real estate firm Jones Lang LaSalle, the city of more than 14 million is being developed as a “Silicon Valley” of China at the same time as it forges more international links and its tourism market rapidly grows. As a result, foreign luxury brands are investing big in its future prospects by moving into a growing number of high-end shopping complexes that have opened since 2013, including Swire’s second Taikoo Li shopping area in mainland China after Beijing (2015), Lane Crawford’s third mainland China location after Beijing and Shanghai (2014), and the Chengdu IFS complex (2013). “In the past three years, everybody came at the same time,” says Romeo of the luxury brands moving in. “They see a huge potential. Chengdu is becoming a very important hub.” The Ritz-Carlton Chengdu is serving as a hotbed for luxury connoisseurs, attracting a sophisticated clientele from Beijing, Shanghai, and Guangzhou as well as elite locals who have made its decadent afternoon tea in the lounge the city’s go-to daily social event. Afternoon tea has “become really the place to be for the high society of Chengdu,” says Romeo, as he notes the sophistication of the clients he sees in the city. “It’s 90 percent ladies—girlfriends go out, have a good time, and spend two to three hours here talking” while they enjoy the hotel’s classic or seasonal themed menus with elaborate scones, pastries, and chocolates created in partnership with brands such as Godiva. “When they come in, they are very elegant. They really dress up,” he adds, noting that he's observed the style level of wealthy young Chengdu residents now often rivals that of Tier 1 locations. “I was surprised at how people dress up, even the young generation. I was not expecting this for Chengdu.” A big part of Chengdu’s wealth is attributed to its IT industry, as the city is estimated to be the source of half of all the laptop chips in the world and two-thirds of all iPads. Sixty-eight Fortune 500 companies have offices there. In addition, Chinese leisure travelers from Tier 1 cities are flocking to the city with an interest in experiential luxury. Romeo says he’s seen increasing demand for services such as spa treatments and fine dining at the Ritz-Carlton, as well as a growing interest in its tailored VIP travel activities that include private visits to Chengdu’s famous panda research base or Sichuan cooking classes. The hotel’s Chinese guests are well-traveled globally, and have gained high standards for luxury while visiting Europe and the United States. “When they come back in the country, they have these expectations and they look for this lifestyle,” he says. “Every day, they become more and more demanding. When they travel overseas, they have a sense of what is good and what is bad.” One main way the hotel aims to draw these discerning travelers is through its focus on the theme of Chengdu’s famous local tea culture. This includes elements such as a ceremony by a traditional Sichuan kung fu tea master when guests arrive, a special tea spa treatment, and a tailored trip for guests to visit the mountains surrounding Chengdu to pick tea themselves, which they take home in a special box. Another huge priority for Chinese visitors to Chengdu is the cuisine. “For the Chinese, Sichuan cuisine is one of the most important and rich cuisines in China,” according to Romeo. At the hotel’s Li Xuan fine dining restaurant, guests can dine on elaborate local dishes such as beef cooked inside a hollowed out piece of bamboo, which is set on fire at the table and broken open with a hammer. In addition, the hotel has partnered up with a local organic farmer to bring farm-to-table food as demand for organic in China increases. Chengdu is one of only nine locations of Ritz-Carlton in mainland China, four of which are in Shanghai and Beijing. Along with the new shopping centers and hotels popping up across the city, the caliber of luxury businesses flooding to Chengdu remains significantly ahead of China’s additional “Tier 1.5” cities, including Chongqing, Hangzhou, Nanjing, Shenyang, Suzhou, Tianjin, Wuhan, and Xi’an.

Sectors

Insights

Company

Chengdu Leads in Luxury Among China’s ‘Tier 1.5’ Cities