First five-star hotel rapid changes witnesses

By Zhang Hongpei Source:Global Times Published: 2018/2/12 21:08:39

A view of Shenzhen Nanhai hotel under construction in 1983 Photo: Courtesy of Hilton Shenzhen Shekou Nanhai hotel

A view of Nanhai hotel, managed and operated by Hilton, on February 5 Photo: Chen Qingqing/GT



Editor's Note:

Shenzhen, which was an unremarkable fishing village in the 1970s, has grown into a metropolis with the third-biggest GDP on the Chinese mainland thanks to the country's reform and opening-up policy that began in 1978. As it benefited from the flexible policy and facilitated investment environment of the Shenzhen Special Economic Zone, the city attracted the attention of many foreign brands and capital from the start of opening-up, and the young city responded quickly to the fast development.

Global Times reporter Zhang Hongpei traveled to Shenzhen last week to visit three "firsts" there or across China - the first five-star hotel, the first McDonald's restaurant, and the first solely foreign funded company, which have witnessed and recorded the changes over past four decades. This is a three-part story.

Situated in the Shekou Industrial Zone, Shenzhen, South China's Guangdong Province, the Shenzhen Nanhai Hotel, the first five-star hotel established in Shenzhen in 1984, has taken the pulse of the former fishing village's social and economic changes during the past several decades.

The hotel was jointly invested in by China Merchants Group (CMG), the Miramar Group based in Hong Kong, the Hongkong and Shanghai Banking Corp (HSBC) as well as the Shenzhen Branch of Bank of China, each holding 25 percent. In total, the companies spent HK$210 million ($26.86 million) to establish the first international hotel in Shenzhen.

Construction began in 1983 on the then-desolate beach of Shekou, the first special economic zone in China to open up to the rest of the world in 1979.

Zhang Yuenong, general manager of Shenzhen China Merchants Maillen Hospitality Management Co, a subsidiary of Shenzhen-listed China Merchants Shekou Industrial Zone Holdings Co, told the Global Times that the Nanhai Hotel was originally for foreign experts working in the South China Sea oil field exploration companies, who were invited by the Chinese government to boost the local economic development in the early 1980s.

"However, Shenzhen did not have a premium hotel at that time, and the Chinese mainland's hotel services industry lacked advanced services and management concepts," Zhang said, noting that the establishment of the Nanhai Hotel was to persuade those foreign expats to stay.

Facing Hong Kong across the sea, the Nanhai Hotel made headlines even before its opening by sending 300 newly recruited staff from Beijing, Shanghai, Hangzhou, capital of East China's Zhejiang Province as well as other major cities, to Hong Kong's Mira hotel, the first-class hotel run by Miramar Group, for a three-month training course. It was the largest training program at that time, Zhang noted.

Paid about 200 yuan ($31.76 at current exchange rates) a month, or about twice the average maximum of more than 100 yuan in the mainland, Zhang was one of the 300 employees attracted by the handsome salary. They were dispatched to Hong Kong, then a dreamland for most Chinese youth, to learn advanced hotel management.

"The training, as a window on the world outside, genuinely opened up my mind and it was the most significant thing for my career in subsequent years, since I knew what service really is and how to serve customers well," Zhang said.

Trying to catch up with international standards in the hotel sector, "Shenzhen's hotel services industry took earlier and faster steps compared with other cities in China in terms of cultural concepts, service techniques, hotel management and other aspects of tourism thanks to the opening-up," he remarked.

The structure of the Nanhai Hotel's customer base was another example of the super-rapid development speed of the local economy under the reform and opening-up policy in the past several decades.

"Westerners took up 70 percent to 80 percent of the customer base when the hotel opened, while the rest were Singaporeans. Very few came from Hong Kong. You could barely find a guest from the Chinese mainland then," Zhang recalled. The ratio, however, had dramatically reversed by 2000 when most of the guests were the Chinese mainlanders, reflecting rising living standards.

"Since 2010, you can see the market has been almost totally led by Chinese due to our ever-growing demand," he said.

To keep pace with local economic development, CMG decided to upgrade the old Nanhai Hotel by building a strategic partnership in 2013 with Hilton, a world-class hotel brand, as the management entity. It was then that the current name - Hilton Shenzhen Shekou Nanhai - came into being.

CMG is now the sole owner of the hotel; the other three shareholders exited 25 years after the investment agreement was signed in 1983, which stipulated that their equity would be given to CMG without any conditions.

"From this view, foreign funds did fully support the local economy's development and brought far-reaching influence," Zhang said.

He said that as China moves to further open up the services sector, the hotel industry will offer more opportunities as it matures.

In another dimension of opening-up - going global - CMG wants to use the model of Shekou, dubbed "Port-Park-City," as a template to build an industrial park and subsequently a city to support the initial development of a port. It will also step up efforts to explore more opportunities in the Belt and Road initiative, Zhang noted.

Posted in: ECONOMY,COMPANIES,BIZ FOCUS

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