Size offers many advantages. That is something that Eric Wu, CFO and executive director of the Plateno Group knows all about. This Chinese hotel group has been competing in the market since 2005. A decade on, it runs over 3,000 hotels under 14 brand names in 300 Chinese cities and nine countries – and still has plans for extensive growth. In addition to expanding in China, Europe and Africa (four new hotels are scheduled to open in Kenya by the end of 2016, and besides Paris the group is also represented in Salzburg, Linz and Berlin), the company is also targeting more business with digital customers. The fact that this group generates around 75 per cent of bookings for around 600,000 rooms via the corporate website and the app-driven loyalty programme, which has 80 million members, puts the organisation in a very strong position, to the point of making it non-reliant on OTAs.
Wu explains his position thus: the future of our customers, our marketing and our technology lies in our own hands. He would like to save on the 15 per cent commission for the approximately 12 per cent of OTA bookings wherever possible, as the group must operate efficiently. Incentives include reduced membership costs, immediate benefits and interesting bonuses for guests who sign up to the customer loyalty programme. With ten million followers, Plateno also has one of the biggest corporate pages on WeChat, China’s social media combination of Facebook, WhatsApp and Instagram. They can use it to chat with the hotel manager, book directly and provide feedback. That is something that appeals to the main customer group: 60 per cent of customers are aged between 18 and 32, and 40 per cent of all bookings via corporate channels are made using via WeChat.
This wealth of data is of huge value, and Plateno aims to make further use of it in the future. However, it does not intend to sell the information to other users, but instead to boost demand for other travel products and services which the group wants to include in its portfolio. In China, ’owning’ the customer would appear to be a decisive factor for success. The Chinese market changes more rapidly than Europe’s, which is more established. “In Europe it is possible to reliably calculate business models based on historical data. In China demand can change altogether within the space of one year”, says Wu. One good reason to be in direct contact with the customer.