Nigel Grocock runs the The Regent Beijing and Park Plaza Beijing Wangfujing. As Beijing prepares for next year's Olympics, Grocock is positioning his hotels as a prime choice in a great location.

How do you and Carlson see the Wangfujing area of Beijing expanding in the next five years?
I think that you've really got to look at the combination of Carlson with the Fu Wah International Group because I see it very much as a partnership. If you look at the Wangfujing area this is an area that the Fu Wah company is trying to develop.

Obviously this is their prime development area at the moment. It started off with the Park Plaza Beijing Wangfujing, and the Hua Li Building in December last year. It's really developing, expanding off the Wangfujing area. And obviously they chose Carlson to be their partners in this scheme.

Wangfujing at the beginning had quite a lot of hotels – but nothing particularly up-market. And then the Peninsula Palace Beijing came in, and then nothing happened for a long time. Then there was a lot of hotel construction on the third ring road but nothing really happened in Wangfujing until the Grand Hyatt Beijing opened.

Now there's an increasing number of hotels in this area, the Hong Kong Jockey Club have got their own clubhouse and the Hilton are opening a property the other side of Lee Gardens. So we are beginning to see a resurgence of this area – and the hotels which go with it. The market is changing. The market traditionally was leisure based; and to this day The Peninsula Palace Beijing (previously known as The Palace Beijing) is a leisure based hotel – with some corporates. When the Grand Hyatt Beijing came in with Oriental Plaza the office buildings made it [the area] viable for a different range of hotels.

A major change has been the connection of the Airport Expressway to the Second Ring Road. When I was here before running the China World Hotel and Traders Hotel Beijing, the Wangfujing hotels, at that time were at a distinct disadvantage because of how long it took to get there from the airport – now it takes the same amount of time.

How does Wangfujing compete and who do you compete with in the area?
I think Wangfujing has a large advantage in the MICE business. Firstly because of its proximity to the two probably most famous places in Beijing, the Forbidden City and Tiananmen Square; which is why it has traditionally been a center for leisure oriented travelers. The other major advantage is that it's relatively new: the trouble with many meetings and incentives is that where you are is just as important as what you are putting on. Most of our business has been very top end. Recently we had Ogilvy & Mather, Ernst & Young, and Microsoft. And they bring in business because of their clients. This location makes us popular with the incentive market too.

We compete with everyone. Our facilities are designed with our MICE market in mind. For example our ballroom is deliberately not very large, we are not in the market to compete with the Kerry Centre Hotel Beijing or the China World Hotel because we want to be producing standards that one can only achieve at a certain size. Our ballroom is 670 square meters so we can seat about 420. And then we've designed our coffee shop, Café 99, with an entry area and an open kitchen, which is where the buffet is located. Past the kitchen are there are three smaller areas which are semi-private so that there is an area that will seat about 26, one that will seat 15 and a private room. People in the meeting rooms have a semi-private are in which to eat together but everybody shares the same buffet. It's all about achieving standards, our Italian restaurant is deliberately small, our bar and grill only has 38 seats keeping it small and intimate.

How do you see the benefits of having twin hotels?
Above ground we are two separate hotels, but I actually run the hotels with three separate teams: a Regent operations team, a Park Plaza operations team, and what we call "shared departments" (for example engineering, human resources, finance, parts of sales, and security) these are all shared. Underground we are completely connected, for example there is one cold kitchen supplying both hotels, one storeroom, one locker room. So although we are two operations we are still one team. We have a different operating philosophy for each hotel, the culture for the company is the same but we have to focus people into different areas based on what we are trying to achieve. There's a lot of synergy, we all eat in the same canteen.

When the Regent first opened, after the first two months, 90% of its corporate customers were the same as the Park Plaza's: just different levels. Over time the two moved apart but there are more synergies together than competition, our conventions services department look after both properties.

Why should MICE professionals choose your hotels as venues instead of others in the area?
For large events customers can use both properties. With multinational events, for example, different countries might have different budgets for accommodation, but they are all attending the same conference. So they have a choice as to where they stay. We get quite a lot of that kind of business. Even though people are staying in different properties they are in the same location. This gives us an advantage over some of the other hotel groups. The guests in both hotels can eat in the other hotel and charge to their room, this adds a lot of value to the Park Plaza in particular. In total we have seven outlets which gives guests and MICE organizers a lot of choice.

What types of preparations are your properties making for the 2008 Beijing Olympics?
We are already fully booked. We contracted 70% of rooms to BOOC, that's 342 rooms. BOOC have then allocated those rooms. The rest of the rooms have gone as well: to large corporate customers.

What we will do for the Olympics is based on who is staying in the hotel because our job is to meet their needs more than anything else: for example corporate customers may want hospitality suites. Our job for the three weeks is to give our guests the best possible experience.

We will be working with the Lee Gardens, they don't have the same level of F&B as the hotels so we are looking at how, for that period, they can sign for the Lee Gardens and come and eat here.

How do you plan to expand your use of email marketing and online advertising to target important MICE decision makers?
It's best to talk about the Park plaza since the Regent is a relatively new property. A lot of what comes through the reservation channels is actually dependent these days on how many RFPs have been signed with multinational clients. Obviously as a new hotel the Regent does not have that many, one of our major targets is to get more for next year. Park Plaza has been open for a year and, at the moment on-line booking represents about 38% of our reservations: which is high, higher than one would expect, about 40% of revenue.

There is the normal bar rate, then certain channels get a discount off that bar rate. Then one might decide to do certain promotions. For a hotel such as this most reservations will come through the master nationals, they would probably make up 10%. An unusually high number of bookings are coming from inside China. We are just launching a Chinese web site and search engine.

What's your hotel current business segment and percentage (corporate FIT, MICE, leisure) of your right now and do you expect any improvement in the future?
There's a certain amount of leisure business, which is on an ad-hoc basis (we're not into the groups business). It's split approximately 50/ 50 between Asia, and America combined with Europe. Japan, Singapore, and Hong Kong are the predominant source countries in Asia. And we do some business out of China too, mainly from Southern China – it's small but regular.

FIT follows a similar pattern. A certain degree of business comes from the Carlson network and I see this expanding. Regent is relatively new with Carlson but we will see this develop over time. Because of the size of the corporate offices near our hotels we will never be one hundred percent corporate. We look for a healthy mix. Tour groups are a source of revenue in low season and over the national holidays when corporate and MICE numbers are low. A lot of groups at these times are domestic – we even have even had a family from Shunyi [a Beijing suburb] book in for a few days in the city center over the holidays.

What is your current position in the market and how do you differentiate yourself from other hotels? What will be your focus in terms of hotel's revenue per available room?
Beijing is not a simple market, there's the five-star deluxe, then the five-star international, then the five-star local hotels. Then there are the four-star international hotels and the four star local hotels. We would see ourselves in the five-star deluxe bracket, however at the end of the day our guests determine how they perceive us. If you are not getting enough guests, then there is a marketing problem, or a property problem, or a service problem. We would place ourselves at the top end of the price range: with the Peninsula Beijing and the Grand Hyatt Beijing. At the moment I would see the Park Plaza Beijing Wanfujing with the Novotel Xinqiao Beijing. In the future I would like to see it get to the level where it's competing with the Crowne Plaza Beijing: perhaps not this year or next year but we have the potential. Looking at customer demand there is an opportunity but we have to be very careful and very sensitive how we do it.

The whole market is changing and changing across the board. There's more development in five-star international and five-star deluxe than in four-star. At the moment there is still an undersupply of rooms at certain times of the year. Hotels might be opening before the Olympics but they're not opening for the Olympics. All the hotel groups are here because of their confidence in the economy – and that's what it's about.

What type of corporate social responsibility programs do you currently have and how do you promote those to the public?
Our environmental activities, at the moment, are about what we are doing from the technological point of view not to increase the carbon footprint, and try to keep that as low as possible. For example our three buildings are connected from an energy point of view which reduces the amount of equipment required, with cost savings and some environmental advantages. Customers are beginning to demand that we do what is necessary to achieve environmental targets. At the same time the customer only wants it when it suits them. However I think that will change over time, for example luxury hotels don't use plastic laundry bags any more. One day wooden coat hangers will disappear.

Carlson as a company does a lot for children's charities. It has been predominantly based out of the US, but this year and next we are spreading it to Europe and Asia and so it will become a Carlson wide initiative. At the moment from an individual property point of view, because we are relatively new we have been piggybacking on what Fu Wah are doing which is far more in the Chinese region. One of our goals for next year is to start our own initiatives. We are very keen to get involved in education. We don't want just to give money, we want to say "What skills do we have that can help people start their own business?" that's far more important. So we will be looking at what skills do we have as a hotel that we can use to train people in poorer areas to help make them more self sufficient.

What would you like to recommend to hotel bookers if their colleagues could only stay in Beijing for three days for a business trip? Are there any spots in Beijing for great entertainment that you could suggest them after a long day's work?
It depends on the individual – some people would like to try Peking Duck, others may want to try Chinese food but a more modern style, we would recommend them to try a restaurant such as My Humble House. At the end of the day we are here to offer customers what they want – we often recommend restaurants which offer cuisine which is out of the scope of our own F&B outlets. Some people enjoy the Wangfujing night market where they can sample authentic Beijing snacks.

One very pleasant aspect of our hotel is that at the back we look out over a traditional Hutong so customers have the feeling of being in China while staying in an international hotel.

(average: 1.00 out of 5)

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One Response to “Juggling Two Beijing Hotels, Preparing For The Olympics”

1. By YS – December 7th, 2007 at 11:55 am

   How can I reach Nigel Grocock.
   His e-mail address.

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