Company Special: MGM, Diaoyutai team to build 10 hotels in five years

Updated: 2013-03-07 07:40

By Yang Cheng and Zhang Shiyi (China Daily)

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Luxury hotel group MGM Resorts International is setting sights on China in its drive to expand the global reach of its brands, company leaders say.

"To date, 70 percent of MGM's revenue comes from the non-gaming sector, and we have awoken to the fact the US market has matured," said Bill Hornbuckle, president and chief marketing officer of MGM Resorts International.

He said the company has shifted its focus to leisure destinations and entertainment.

To this end, the company has been teaming up with China's Diaoyutai State Guesthouse to accomplish a five-year brand expansion plan that includes opening 10 hotels in China.

The 800-year-old Diaoyutai State Guesthouse was formerly a royal leisure fishing terrace for the emperor, and later it was used to accommodate high-level foreign dignitaries and heads of State.

As a partner, the guesthouse lends its prestige to MGM, and the two companies are now working to realize a "joint vision", said William Scott, executive vice-president for corporate strategy and special counsel for MGM Resorts International.

"I believe it exemplifies the mutual understanding between the US and China," Scott said.

Company Special: MGM, Diaoyutai team to build 10 hotels in five years

The company made its first forays into China with two projects in Sanya, China's top tropical tourist resort.

It opened its first hotel in China, the MGM Grand Sanya, early last year. In January this year, the company became management consultancy firm for a set of luxury apartment towers at Serenity Coast, a leading property development, and rebranded them as Diaoyutai MGM.

Within two months, it sold more than 100 units worth $130 million, a stunning figure in Sanya's property sector.

Hornbuckle, who declined to release the overall investment figures for the company's new China operations, said MGM is credited for its hotel, residential, entertainment, food and beverage products. The brand is seen as a "lifestyle" producer, so more "creative" projects will be in the pipeline, he said.

He said he has spent much of his time lately visiting and inspecting projects to be unveiled in China.

Hornbuckle describes the brand: "We are engaging, entertaining and inspiring," he said.

Bellagio, another luxury brand under MGM portfolio, is under construction in Shanghai's Bund.

An MGM Grand hotel will be opened at Chongqing's highest tower, which will be constructed by Longxin Property in four years.

Scott, who is also a board member of Diaoyutai MGM Hospitality, said two new resorts that draw on the historical cultural resources of their surrounding neighborhoods will be opened in the near future - the Diaoyutai Hotel Chengdu and Diaoyutai Beijing Lama Temple.

Scheduled to open in the latter half of the year, the Chengdu hotel will incorporate a style of architecture that matches the surrounding Qing Dynasty (1644-1911) buildings of the city's famous historical and cultural tourist area Broad and Narrow Alley.

Diaoyutai Beijing Lama Temple will be opened in the first quarter of next year on a prime piece of real estate near the Lama Temple, which was originally built in the Ming Dynasty (1368-1644) as an official residence and later was converted into a Buddhist temple.

The hotel is also just a short walk away from the second-largest Confucian Temple in the world, built in 1302.

"Our partner Diaoyutai is ferociously protective of its brand," Scott said.

Another hotel under the Diaoyutai brand is under construction in Yanqi Lake in northern Beijing's Huairou district near a summer resort for government officials.

Keenly aware of the difficult road ahead, Hornbuckle said the challenge "is how to take brands from the US and present them in a way that caters to Chinese tastes".

Hornbuckle also expects having more MGM hotels in China will help boost its influence and bring more tourists to their resorts in Las Vegas and Macau.

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(China Daily 03/07/2013 page14)