‘Small’ Langham plans to be a big player in luxury market
HK-based firm dating back to 1865 has 10 properties in development pipeline for the mainland
In an industry where acquisitions and mergers are happening more frequently than ever, with the approach being adopted by some of the biggest players, Langham Hospitality Group, with a history dating back to 1865, believes in the power of being small.
Not that being “small” is keeping it from an aggressive expansion on the Chinese mainland, the world’s potentially largest market for luxury travel.
The Hong Kong-headquartered group has 10 properties in the development pipeline for the mainland in the next two to three years, almost doubling its presence in the market. Currently, it operates a total of 21 properties with more than 8,600 guestrooms worldwide, according to the company.
The 2015 merger of Marriott and Starwood, still one of the biggest events in the hospitality industry, actually “makes (the situation) easier for us,” said Simon Manning, vicepresident of the company’s sales and marketing of Langham.
“Our industry is becoming homogenized, while luxury is all about services. It’s gonna show who are the true players left,” Manning said during an interview in Shanghai on Monday for the group’s annual general managers’ conference.
“I think true players can only be small players, purely due to economy and scale.”
Chinese consumers, in particular, care as greatly about services, and want one-of-a-kind experiences, as their Western counterparts, if not more.
Manning noted that the biggest change in China’s luxury travel market is that 10 years ago, travelers bought just about everything, and now, they have started to look at particular interests, such as wine tours in Napa Valley, or going to polar ice caps.
“Ten years ago, when a Chinese consumer said ‘I have been to Paris or London’, they got a wow. And now their friends might follow to ask where you stayed and why, and how the experience was before uttering a wow,” he said.
To take advantage of such changes, hospitality brands should grow well on the mainland so that Chinese travelers can pick them when they are away from home, he noted.
In early July, Dalian Wanda, China’s homegrown property and hospitality conglomerate, sold 76 of its hotels to Sunac, a Tianjin-based property developer, for 63.18 billion yuan ($9.29 billion).
Manning noted that the different approach adopted by Langham, running both as an ownership and management group, is also a winning edge for the company.
Nearly two-thirds of the company’s hotels worldwide are both owned and managed by the group, which has a portfolio of four brands — Langham, Langham Place, Cordis and Eaton.
“We are very fortunate that behind our company we have a very strong real estate business from the Great Eagle Group that supports our growth,” Manning said.
It not only helps the company to maintain all of its brands on a consistent level and standards, but also go to destinations such as Paris where there is little chance of picking up management contracts, as nothing has been built there, whereas the group gets to “build its own location”.
Manning saw the biggest challenge to stay ahead of the competition in China as “staffing”, since the company wants every one of its Chinese property to have a Chinese general manager.
“Our goal is to take our talents within our hotels now and grow them up by putting them through our programs so that they are ready to be our generation of leaders and we can go into tier two and three cities.”
Our industry is becoming homogenized, while luxury is all about services. It’s gonna show who are the true players left.” Simon Manning, vice-president of Langham Hospitality Group’s sales and marketing of Langham