Mitchell Presnick runs Super 8 Hotels (China) Co. Ltd. The company has been growing fast in the China market and is quickly becoming one of the top economy hotel chains in the country.
What is your strategy for expanding the Super 8 brand in China?
We have a mixed model of ownership — franchise and self-owned. The number of our own operated properties is increasing; we are opening 25 properties — up from the five we currently own. In addition we offer a management service to franchisees, so we have three models — own operate, franchisee managed, and franchisee managed by us.
We are focusing on lower tier markets, we think this is where the growth will be — fourth and fifth tier markets are performing well. Also it is becoming cost prohibitive to open economy hotels in major cities. As Mao Zedong said , "The countryside surrounds the town".
Our geographic coverage is truly nationwide, from Urumqi to Xishaungbanna, from Inner Mongolia to Kunming. We have a property opening in Tashkar which is about as far west as you can get in China. Ours is a true national distribution policy, unlike some other brands that concentrate on regions such as Shanghai. Our pricing is strong in our market segment.
How have international brands such as Super 8 influenced the economy hotel marketplace in China?
One of the first things we have tried to be is a positive influence on the market. We have had a lot of interaction with the government departments that set the standards. We have given them examples of how things are regulated elsewhere — in North and South America and Europe, for example — and emphasized the need for good safety standards and for training standards. As an international brand we have a strong responsibility to China and to the industry — we are the international standard. We aim to set an example for other hotels — in a respectful way — working in areas such as safety. We work with non-branded hotels in areas such as English-training and how to receive foreign visitors.
We view everybody in the industry as working towards a common benefit and have a very good relationship with the other hotel groups and encourage them to keep the same standards of "safe and clean" and the same service levels. At the moment the economy hotel industry is going through a period of pre-consolidation. There are around 150 little chains of economy hotels with five to ten properties, however this fragmentation will not last forever and a number of strong players will emerge. There will be many targets for acquisitions and mergers.
China was the first major new market for Super 8 outside the United States and China. What changes have you made to the way the brand operates?
Our core operating philosophy and principles remain the same — everything else is on the table. For example our logo includes Chinese characters and breakfasts are suited to local tastes. Remember that there are significant regional differences in the USA or Europe. And there are significant regional differences here in China — for example there are differences in diet between the east of China and the west of the country.
We are know for our flexibility with our local partners enabling them to act as entrepreneurs and not stifling their initiative. For example some choose our unified product "the room of the future" and others opt for a standard room. All of the rooms are to the same standards but they may look different — such as with different colored walls, but always "clean and friendly".
Could you say a bit about "the room of the future"?
We think we have a very good product. Each room has a dark wood-laminate floor that is easy to maintain, sound absorbing, and long lasting. The rooms have interestingly colored walls that have been shown to make people feel good. It's built around what travelers want – somewhere that is comfortable for a two or three day stay and not just like home. We confirmed this with extensive focus groups.
Every room has a 25-inch flat screen TV and a custom built unit designed with travelers in mind. The unit has a cushion on top and cubbyholes for storage (there are no dressers in the room). We found that when people travel in groups in China they like to congregate in one room — perhaps before going out to dinner. The unit gives people somewhere to sit so they don't have to sit on the bed.
The bathrooms have curved shower curtains so they don't touch you while you're showering and the rooms are a light blue teal in color. There are custom built counters with extra counter space — two tiers — since we found that people like to set out their things. There's ample counter space for two people traveling together.
The room of the future is designed around the way people travel. In China, two-thirds of our guests are business travelers and only one-third are leisure travelers — the reverse of the ratios in the US.
How do you use the Web and email to promote your brand ans conduct loyalty marketing?
We have a database in our Beijing headquarters with about one million contacts for short promotional emails. Then we have the VIP card that is like a club — holders pay CNY38 and then get all the benefits of the card. And then there is our group loyalty card; about 70% of guests hold one or the other. We use train advertising in soft sleepers.
Every property has a billboard supplied by us at no charge showing the national reservation number — our hotels are a key advertising vehicle.
How does Super 8 develop and retain its staff?
Hotel staff in China have a lot of options. Our number one priority is good trained labor. The hotel business is all about people and is really growing fast in China — the economy sector is growing fast. We aim to be a healthy place to work. Our values come from the USA but are applied to China. Firstly, love one's country — support the Olympics. Secondly put people first emphasizing the service side — how we deal with customers and staff.
Super 8 was founded in 1974 in the north midwest USA. In states such as Kansas with a small and dispersed population people are naturally friendly and interested in people and our philosophy stems from that.
We place great emphasis on training — we train a lot. Certainly some people will then go to other places but this does not worry us, overall it will make the industry stronger. We think of ourselves as a graduate school hotel trainees. In our training facility in Dalian — which is in a Super 8 property, by the way — we train 200 people every week. We train on every aspect of hotel operations from being a GM to engineering, and of course we put great emphasis on safety and security. We run the trainer courses for people who will run courses in their own properties. And training is an essential part of becoming one of our franchisees.
What corporate social responsibility programs does Super 8 have?
We are looking at job training and ideas for orphans — practical training. We like to stay close to the [hotel] sector — things that really touch people. Our contribution to the Olympics is a good example in a way in that we have a unique way to contribute. We understand what to expect and what is expected of us.
Our training programs are a contribution to the industry as a whole. We aim to do things that are good for the industry, good for people, and good for the country. We are very open to ideas and view everybody in the industry as a colleague.