China’s Dossen embarks on midscale, European push
 
China’s Dossen embarks on midscale, European push
21 MARCH 2017 8:09 AM

It might be only the eighth-largest Chinese hotel company, but Dossen Hotel Group intends to make inroads into Europe and beyond with its eight-flag stable of midmarket brands.

BERLIN—China’s Dossen Hotel Group often might be eclipsed by the noise created and capital spent by peer companies Jin Jiang International and HNA Tourism Group, but it is slowly amassing an impressive portfolio in its domestic market and beyond, according to company President Hansen Zhao.

Privately owned, the firm originally was named Eastern Crown, before adopting City Comfort, which remains one of its brands. Dossen Hotel Group became its new guise last year.

Speaking with Hotel News Now during a break at the International Hotel Investment Forum, Zhao said the Guangzhou-based company has progressed quickly from its formation in 2006, coming swiftly to the attention of Western hoteliers when it struck a deal with Marriott International to develop and operate roughly 140 Fairfield Inn & Suites branded hotels in China.

That deal aims for all those properties to be signed within five years, with 100 of them opened by 2021.

Dossen’s Facebook page stated the firm currently has 900 hotels in 200 markets, and Zhao said the next market for expansion will be Europe.

After Dossen grew fast in China, he said it started to open assets in Southeast Asia, which is still the favored travel region of the majority of Chinese travelers. This is especially trust for Malaysia and Myanmar. Farther away from its source market are properties in Belarus.

He said the agreement with Marriott is a very important step for the firm.

“It’s very, very important for us because … the customer in China really wants something like Fairfield. So based on this kind of requirement, we collaborated with Marriott. And you know, I think we are very lucky. Also, I think Marriott trusts us. That’s the reason we can go together and duet in the China market. I think it’s also the first step for us,” Zhao said.

“Our main strategy is asset light. Most of the properties are kind of manchised, but we do also own something less than 10%,” he said.

Business models, nevertheless, are always being re-analyzed, Zhao said, due to the incredible speed of change in China.

“A lot of new competitors are coming, so we have to adapt our strategy to make sure we can have enough speed in the China market. So, we also invest in some companies as sort of a platform strategy, (while) the global strategy is not only bringing our brands outside but also bring some good things inside the China market,” Zhao said.

“We have enough patience,” he added.

Midmarket mavens
Dossen is undertaking a midmarket strategy in both its domestic market and foreign expansion plans.

“At the very beginning, we started the chain for budget hotels,” Zhao said, who added he believes his company enjoys a good reputation inside of China.

He referred to City Comfort Inn as the “entry level of midscale,” but as with the parent company’s name evolution, he said to expect new blood injected into this brand, too.

“We are going to bring a new name for City Comfort Inn,” he said. “We are announcing (that) later. We have three entry-level midscale products. This segment in China is growing very, very fast now.”

In total, Dossen has created eight brands, all occupying price points within the midscale arena and including Echarm, business-focused Borrman and Echeng, resort flag Immersing, serviced apartment flag Polton and millennial-focused Nice to Meet You.

Competitive China
Dossen’s portfolio and brand count is impressive, but in China it is ranked the eighth-largest hotel concern, according to the IHIF conference website.

That does not bother Zhao, who plans on driving Dossen into the top five, with European expansion being at the center of that push.

“We’ve learned a lot from the Europe market in the past 30 years, and a lot of Chinese customers just love this style, the classic, the spirit of the European product. So that’s why, first of all, we want to expand our portfolio with the help of local partners in Europe,” he said, who added help would come via the firm’s 10 million-strong loyalty program.

“They have requirements and they’re asking us, can we stay in the same kind of hotels in Europe? In Southeast Asia? In America? Because, you know, the young generation in China, they want to try something different, also in some creative ways. So that also brings some ideas to us. We are still in the early stage to analyze this kind of trend, and probably we’re going to find some opportunities there.

“The good thing for us, some European companies or some companies from other countries, they want to expand their business in China. So, I think one of our strategies is to swap the market. We can expand business for you like what we are doing now for Fairfield and Marriott. And also we can do similar things for other brands, but no conflict with Marriott,” he said.

Zhao also said a luxury brand also could be a possibility in China.

He also is not worried by recent Chinese government announcements to slow down gross-domestic-product increases and outbound capital amounts.

“If you look back the past 15 years, the (hotel) market is growing very, very, very fast, but now with GDP, with pollution, with many things, China’s government and also the people … want to grow a little bit slower but with qualities,” Zhao said.

4 Comments

  • Howdy April 27, 2017 1:40 PM Reply

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  • Howdy April 27, 2017 1:40 PM Reply

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  • Jennabel May 9, 2017 11:18 AM Reply

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  • Jennabel May 9, 2017 11:18 AM Reply

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