Starwood’s top executives are in Shanghai, China now. They will stay there for a month to get “localized” by the Chinese culture and “Chinese way” of doing business. In this MSNBC News video, Frits van Paasschen, the President and CEO of Starwood Hotels & Resorts Worldwide provided many good reasons of why Starwood needs to pay top attention to the Chinese market. I agree with him 100% and will not repeat what he said on the video. Instead, I would like to bring up one challenge and one hidden opportunity of entering the Chinese market.
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The picture was downloaded from travelchinatour.com
I believe that the biggest challenge is to manage a company’s human capital in China, including recruitment and selection, training and development, and retention management. It is very difficult to recruit well-trained local managerial talents in China. Companies may assume that there must be abundant good candidates in a country with a population of 1.3 billion people. Yet, not every candidate has the proper education or training that a company desires; many college graduates are “book-smart” and needs extra training before they are ready to make sound business decisions on their own. Accordingly, companies need to plan a large budget for some very basic HR functions.
Another relevant area that needs special attention is employee retention. If Starwood is opening a new hotel every other week in China, other hotel companies, like Marriott, Hyatt, and Hilton, will not fall behind. Hotels are competing with one another to attract the top talents in a very small pool. If hotels do not want to see their well-trained managers working for their competitors, they had better take good care of their people and keep them aboard.
The huge hidden opportunity of entering the Chinese market lies in the advantage of gaining brand recognition among the Chinese consumers in China. Even though many developed countries still have very tight restrictions of issuing visa to Chinese travellers, I believe these countries, including the U.S., will open their tourist market to Chinese travellers soon. By then, if 1% Chinese will make their own travel arrangements to the U.S., those well-recognized hotel brands, as compared to the other local hotel chains, will probably have a better chance of attracting the 13,000,000 outbound Chinese travellers. Who does not want that business?
The picture was downloaded from travelchinatour.com
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