Wanda’s Zhu talks about roaming West

Only four years young, Wanda Hotels & Resorts is starting to spread its wings beyond China and has designs on what seems to be a reasonable goal of reaching 160 hotels globally by 2020. It raced to 100 hotels in China so quickly that, in October, the Wanda Vista Hefei became that milestone opening.

The hotel management company of Chairman Wang Jianlin’s Wanda Group has three active luxury brands (Reign, Vista and Realm), with a fourth, an experiential lifestyle brand called Jin, recently launched with a handful of deals initially in China. The portfolio includes business hotels and resorts under the management of more than a dozen international hotel brands, as well as self-owned and managed hotels.

The first five projects abroad have been signed and will carry Wanda’s international Vista brand with developments ongoing in Chicago, London, Sydney, Los Angeles and Gold Coast, Australia. While Wanda Hotels & Resorts’ Executive Vice President Fenming “Kent” Zhu couldn’t speak to questions about acquisition and real estate development, he did project a very bullish posture about Wanda’s potential as an astute global manager, and even as a third-party manager.

“Our mission is to build a respected international luxury hotel company from China,” Zhu told HOTELS’ Investment Outlook. “First, we are a hotel company from China. Second, our focus is on the luxury segment. That translates into being very careful about the quality we deliver. People may perceive Chinese products as not being of good quality. But we are very committed to bringing quality experiences to overseas markets and the hotel industry in China. We are very committed. When we build, we build quality.”

HOTELS’ Investment Outlook interviewed Zhu to learn more about the company and its near-term goals.

HOTELS’ Investment Outlook: You are exporting the Vista brand. What can you tell us about its DNA?

Kent Zhu: Wanda Vista is ideal for overseas because the brand has strong Oriental elements – in terms of interior design with strong local Chinese culture done tastefully and contemporary, and on the service side where we incorporate a lot of Chinese history. For example, China has a big tea culture. How do you drink tea? We want to bring that overseas. Chinese restaurants, in Chicago for example, will have Peking, Beijing and Schezwan style cuisine combined into one. Every overseas hotel will have a Chinese restaurant with a Chinese-born chef.

HIO: Tell us about the new Jin brand.

KZ: It has more of a lifestyle focus for younger-minded customers. It will have smart facilities, lots of high tech, and the décor will be more lively and joyful. For the Chinese market, lifestyle is becoming much more popular. We just introduced the brand last week and already have a few deals signed for China.

HIO: Are you sure you are ready to take on global third-party management as just a four-year-old company?

KZ: The strategy just launched a few months ago and we already have a handful of overseas third-party management contracts signed.

Within China, we are recognized as the Chinese hotel operator unlike any other, so there are a lot of owners very interested in our brands and management. They see the quality of Wanda hotels as very high. We have all the bells and whistles, including loyalty programs and management platforms, compared to other Chinese groups. We have systems and channels. Wanda is very strong in IT and has developed proprietary management tools, including those that empower staff, create efficiencies and accuracy in service delivery.

For example, we have our own purchasing platform. Many hotels want to centralize purchasing but find it too difficult. We have order codes for 80% of the product we purchase, and all of our hotels are going to the platform. We have succeeded where many have not been able.

HIO: How do you best sell third-party services?

KZ: The best way we sell is to bring owners to our hotels to experience and see it. Our commercial terms are the same as others, so owners are more interested in the value we bring to the hotels. One major factor: The Chinese market is becoming bigger, and with our own brand, for sure we are able to bring more Chinese customers to their hotels.

HIO: How has Wanda performed in 2016 and what is the forecast for 2017?

KZ: In 2016, we have seen double-digit revenue growth as a company, and even though the economy is not as robust, our hotels are improving in all markets as consumers still have a lot of money to spend. We see a lot of holidaymakers, family spending over weekends.

Strangely enough, upper-tier luxury hotels are having an easier life than budget hotels because Chinese people want to have experiences, at least at this stage of consumer spending behavior.

We think the trend will continue for 2017. Our focus is getting ready for overseas openings and as a company we are developing new line of hotels called Wanda City, which are destination facilities with theme parks, malls and hotels. Next year we are opening a Wanda City in Harbin, and we are getting ready for other cities. It’s a big part of Wanda’a strategy.

HIO: What is the longer-term strategy?

KZ: For us it is step by step. Build a solid foundation. Develop a good management team who understand our culture and brands. People make or break the business. Longer term it is about developing our people and building our capabilities. Speed we can control. If you want more, we can sign more, but it depends on how ready we are on the people side.