Old and New Leadership in China's Hospitality & Wellness Industry
An observation on Leadership in China's Hospitality and Wellness Industry
By Michael Koethner Wellness & Healing Consultant, Michael Koethner | November 11, 2012
"Be a yardstick of quality. Some people aren't used to an environment where excellence is expected."
– Steve Jobs
Hotel property ownership and hotel management leadership in china has been a hot topic in the past few years, and there have been many meetings and discussions amongst foreign managers and with local leadership about how to build and operate a hotel or spa business. Most Chinese business owners have no history or knowledge about the hospitality industry and have therefore a lack of interest or understanding of what to do with a hotel. However, due to the increasing demand of quality of products and services across all industries in china this industry will also need to undergo some re-education, change in leadership and adjustments in business regulations, in order to be on par with the international market.
The Hospitality Industry in China has come a long way since the official opening of the country back in 1978 – the period of the economic reform from 1979 to 1987. Before and shortly after that date any hotel or accommodation type of real estate development has been under the control of the political party and its regional leaders (actually one leader only), and used to be known as "SOE's" – State owned Enterprises. Any hotel development in China was mainly seen as an added benefit or as a secondary/lesser income mainly to increase the overall value of an existing real estate business portfolio, and the personal status of its owner. It was only about identification with an exclusive international brand, personal and company recognition in the public eye and power. The importance of ROI (return on investment) came and still comes before anything else. This is still so, but not as aggressive and obvious as it used to be. The Wellness and Spa Industry as we know it today in western countries simply did not exist, here in China. In the past there were meager massage parlors, sometimes operated out of a private homes and apartments with treatments done in the bedroom on the bed, and plenty of TCM clinics but that was about it. Later there was the development of the hot spring and Chinese bathing houses, which originated in the northern part of china, and were mostly visited by the general public, most of the times free of charge and very crowded.
Even today, a hotel, resort is not yet seen as a single run business enterprise and long-term investment of guest service and/or quality accommodation for leisure and business. If a hotel or resort has a spa and/or wellness center build into the property, then it is regarded as a side business with a very low profile and treated as the bathing houses in the old times. Many international high-qualified managers who came here with big dreams and high hopes to help the hotel owners and its employees to gain a better status, and to enhance their career path most often have lost their jobs in a very short time abruptly and most of the times without any given reason, due to a reckless and inexperienced behavior of Chinese ownership. Keep in mind that China's business environment is internationally well known as a brutal way of capitalism, making money out of everything possible, absolutely neglecting the outcomes and effects it will eventually have on the social or economic environment. It is a bit like what the world is currently witnessing about the financial industry worldwide – the irresponsible ruthless behavior of some, for the benefit of oneself only, but on the expense of others, society and the environment.
In early 2010 however, the Government – State-owned Assets Supervision and Administration Commission of China introduced a new legislation that hotels that are not part of the primary businesses from central state-owned enterprises must be divested to other organizations who are eligible to run a hotel enterprise or similar. Meaning, that owners who have had no previous exposure to the hospitality industry will not be able or eligible to own or operate a hotel in the future and must sell the property to someone who has extensive and government approved hospitality experience. These measures have taken the pressure off a little for some of the foreign hotel operators, so that hotel managers can relax a bit and look forward to work with local hotel owners who have had some exposure to a hotel operation. But it is still no guarantee for success.
In addition to all the challenges in the hotel operation, the spa and wellness industry, especially in china, has a very low credibility and a bad reputation, mainly caused by the numerous escort service agencies in the country, which are located near by or inside a hotel, offering other types of massage. Hotel and business owners used this type of agencies in the past for the purpose of attracting potential investors to their company or business. Thus the spa and wellness sector has an even more challenging way to establish itself as a professional healing and health industry in comparison to any other department of a hotel or resort.