Tianfu Minyoun Hospitality and Hyatt Hotels Corp enter into a strategic partnership. (Photo provided to China Daily)
Strategic partnership to establish upscale hotels in second and third-tier cities
Tianfu Minyoun Hospitality and Hyatt Hotels Corp have announced a strategic partnership to expand Hyatt's brand presence in China.
In cooperation with Chinese investors, Tianfu Minyoun, headquartered in Chengdu, Sichuan province in Southwest China, has been authorized to develop 50 Hyatt Place and Hyatt House hotels in the country over the next five years.
The first three Hyatt branded properties, as part of the deal - with two located in Changchun, capital of Northeast China's Jilin province, and one in Nanchong, Sichuan province - will be operated and managed by Tianfu Minyoun as a franchise.
As the first authorized third-party management company for franchised Hyatt hotels in China, Tianfu Minyoun has picked up a good deal of professional expertise along the way, with years of experience in the hospitality industry, said Zhang Jianming, the company's board chairman, at a launch ceremony in Shanghai on Tuesday.
"This is all-around cooperation," Zhang said. "Rather than just focusing on branding collaboration, the partnership will expand along the entire value chain, ranging from planning and design to construction and operation, as well as financial service."
The innovative cooperation model helps to ensure product consistency and efficient delivery, Zhang said. "We will combine local features in our operations with Hyatt's product quality and service philosophy to create new experiences for guests."
Asia Pacific Group President of Hyatt Hotels Corp, David Udell, said that behind the partnership is the two companies' shared values and commitment to brand growth.
"Hyatt has a strong brand reputation among business and leisure guests in hospitality worldwide," he said. "Tianfu Minyoun has profound insights into the Chinese market and has gained crucial financial support to power our collaboration with them."
Tianfu Minyoun has secured a credit line of 30 billion yuan ($4.7 billion) from Sichuan Tianfu Bank, which would be used as loans to hotel owners for construction and renovation projects under the agreement.
Tianfu Minyoun has also teamed up with Road King Investment Group to establish a 10 billion yuan industrial fund to support the deal.
"With our combined efforts, we look forward to creating distinguished guest experiences that exceed expectations in the dynamic and highly competitive China market," Udell said.
Another two brands - Hyatt Centric and The Unbound Collection by Hyatt - are also included in the international cooperation plan. They will be launched in cooperation with investors in the Chinese market, Tianfu Minyoun Chairman Zhang said.
The chairman added that while Hyatt's presence in first-tier cities is strong, there was still work to be done in second and third-tier cities.
With urbanization expansion in China, second and third-tier cities are becoming increasingly important, which are attracting more attention from Hyatt management, said Udell, adding that Tianfu Minyoun has rich experience in operating in such areas.
In addition to the partnership with Hyatt, Tianfu Minyoun has its own proprietary brand portfolio to run.
"The partnership with Hyatt will help us to expand in China, yet quality assurance is a prerequisite for the expansion," Zhang said. "Cooperating overseas is also part of our plan."