Chinese Tourism Organizers in Paris Missed the Hotel Boat

I work regularly with the French Association of Chinese Guides in Paris and the Union of Chinese Tourist Organisms throughout France. My goal is to help large luxury brands with a Parisian presence grow their Chinese tourist sales figures in France.

Shangri La Entrance

For over 10 years now, Chinese tourism organizers in Paris took one thing for granted: that the Chinese tourist would never pay a premium to stay at the higher-end properties – namely 4-star hotels or Palaces as they’re called (recall that France does not have a 5 star hotel classification, and the highest-class properties are labelled as as Four Plus stars).

If you look at daily rates for Palaces, figure 750 euros per night, not including breakfast. The 4 star plus hotels charge around 450 euros a night. Although these prices can seem excessive, they’re in line with what you’ll find in NY, London, or Geneva, for example.

But Chinese travel organizers in France never took the time to analyse what was going on in China’s high-end properties like the Shangri La, the Hyatt, or the Four Seasons. As such, they have been grossly underestimating the modern HNWI Chinese tourist’s buying power.

Shangri La Salons

They still relegate their clients to second line properties like the Concorde Lafayette or the Meridien. And they steer them to lower-end shopping centers like Galeries Lafayette or Printemps when in fact, they should be delivering them to the Triangle d’ Or or Place Vendome.

I had lunch early January with a representative of the guides and travel agencies in question, and we had the following amazing exchange:

“Nathalie, I had lunch at the Shangri La yesterday and check this out: the hotel is packed with Chinese tourists on their own probably paying 700 euros a night. It’s mind-boggling. What’s worse, they’re not even using our services anymore.”

“Mr. X, this is exactly what’s going on right now in these hotels in China and Southeast Asia where Chinese citizens don’t need visas. You should work with these high-end properties instead of scratching your head.”

“We can’t do that. We negotiate the lowest possible prices for our clients. The lowest rates in Paris. But these hotels won’t work with us.”

Shangri La Room

“Mr. X, you need to understand: China is now the world’s second largest luxury market for goods and services. And these hotels saw it coming. They’ve already built and developed a loyal high-end following in China.”

“Nathalie, we need to get our act together. I need to meet with the people who run the high-end French hotels so we can work with them. But I don’t know any of these people, can you introduce us?”

“Mr. X, I’m a little surprised. For one thing I don’t necessarily know all these owners. But honestly, I think it’s their Sales Directors you probably need to meet with. However I do know the Ritz Place Vendome team really well. That’s a strategic property. I can make introductions.”

“Oh my God no! The Ritz is snobbish!”

“Snobbish? What do you mean by that?”

“They never have availability for the Chinese. And besides, they don’t discount. And we need discounted rates for our clients.”

“Mr. X, I know China leads in shopping dollars for Paris, but it’s different in the lodging industry. The Ritz isn’t snobbish, it’s just like any other high-end hotel in Paris. For one thing they’re always full, since Paris is the world tourism capital. For another, they have no reason to dilute their brand by discounting because they know even without Chinese tourists, they’ll still be full. Mr. X, you’ll have the same problem with all the good Paris hotels. Clearly, their want to sell rooms at the highest price possible. And just like me, they know China counts more millionaires and billionaires now than any other country. The days of jam-packed tour buses dumping haggard groups of poor little Chinese tourists at the Motel 6 in some Parisian suburb are long gone. Mr. X, I can help you, but you need to change your mindset about hotels and understand that you need them more than they need you nowadays.”

If you run a Palace or a 4 Star Plus property, and seek to attract the cream of the crop in Chinese tourist visitors, contact us at Zhenji. We’re currently setting up a pilot project connecting Chinese travel agencies with hotels to work out some innovative win-win business relationships.