Apple Computer, Orange Hotel - Wu Hai, CEO of Orange Hotel Group, is filling the gap in the Chinese hotel industry

There are hundreds of hotels to choose from in Beijing, from small budget chains to some of the most luxurious hotels in the world. Wu Hai, of Orange Hotel Group, is working to make middle-range hotels more appealing, and Agenda hunkered down with him to learn what makes his hotels different, what helps him keep them affordable, and what the story is behind the name “Orange.”

Tell us a little bit about the Orange Hotel Group. Orange Hotel Group is all about good design and affordability in hotels. The whole world is changing and the younger generation wants to experience something different. That’s our whole idea: we try to go about creating something that is different, fashionable and appeals especially to the younger generation.
We started with one hotel in Beijing and now we’re up to ten. In total, we have 18 hotels across China in operation; two are Crystal Orange hotels and the rest are the regular Orange brand. Right now, we have five more in the design and construction stages.
When and how did you first get involved with Orange Hotel Group? I was in the online travel business for a while. As a matter of fact, I actually started the first online travel business in China back in 1997. I worked for several big online companies and after all those years I started to understand exactly what customers wanted. I eventually got tired of being the middle man for these travel companies and thought to myself: “Why not be the supplier?”
In China, the hotel industry is very strange. If you look at it closely, you can see that the industry has a dumbbell shape. At the one end, you have a lot of luxury international hotels. At the other end, there’s all the budget hotel chains. In the middle, there’s nothing at all. I saw an opportunity to fill that void with Orange Hotel Group.
How are you able to maintain low prices? It’s more about the concept of the hotel. When we first started this company, we did a lot of market research about what the customer really wanted. For example, swimming pools (at least in China) aren’t really necessary. So we eliminated these types of facilities that people rarely use. That’s one way to keep the prices low.
Another way to cut costs involves our design. We use what we call small design and we design things in a chic way. This way, we don’t have a massive lobby that would cost a lot, but if you look at our lobbies, they are still fashionable. At the same time, we don’t have a huge restaurant, which would be an added cost.
Where did the inspiration for Orange Hotel Group come from? It stems from Apple Computers and their ideas. Look at the iPhone. There are over 10 million iPhones sold in China with little to no advertising. The reason sales are so high is because of the brand and the personality of the brand. It’s cool. People want cool things; they’ll spend money on cool things.
I thought we should adapt this idea for our hotels. People have gotten used to the boring hotel chains. There’s nothing new there. That’s why I decided we have to do something different, something cool. We chose to focus on the experience customers have when they visit our hotels and make that experience be memorable and different.
What is your current business strategy? We have two brands – Orange Hotel, which is our value brand, and Crystal Orange Hotel. We found in our research that the market between budget hotels and luxury hotels is larger than we had thought, so we created these two brands to serve as “middle brands.” We needed another brand to fill that gap between Orange Hotel and the high-end competitors, so we created Crystal Orange.
The needs of our guests are slightly different in China than in other areas of the world. In China, social status is very important. The main way people show off their status is by showing off brands. We make sure to incorporate this when we design our hotels. For example, we have Kohler faucets. Our international travelers don’t care as much about the brands, they just want their room to look good. Our Chinese customers, however, are the ones who tell their friends about our Kohler faucets and LG flat screen TVs. So we do our best to satisfy both those needs because we understand the differences among our various guests.
Speaking of brands, what’s your marketing strategy for the Orange Hotel brand? Actually, we don’t have a serious investment in marketing at all. We believe in word of mouth. The trick to what we are doing is creating a memorable experience for our guests, which then creates an emotional connection with the hotel. We hope that our guests take with them pleasant memories that they then tell their friends.
For example, each of our rooms has a fish to keep each of our guests company. We make cards for each of them telling the customer his fish’s name. This makes the experience friendlier. We also provide each of our guests with a Rubik’s cube and if you get three sides correct, your fish will buy you coffee. It’s these small additions that make our hotel unique.
We try to create things that might be funny or memorable and that are distinct. When our customers tell their friends about these memories, then they voluntarily work as our marketing team without knowing it.
Who is your target market? At first, we thought our hotel would appeal most to the young, urban elite. We figured older guys wouldn’t appreciate the new approach we were taking. It turns out we were wrong.
Some of our older guests said they preferred to stay in our hotels because they thought it was cool. I was surprised. I figured out that our target market was “psychologically” young urban elites; they are young at heart. Those are the ones who love what we are doing here at Orange Hotel Group.
Who tends to stay at your hotels, Chinese or foreigners? We target both groups and I think that comes from our fusion design. Our hotels have a very western feel but we still have some Chinese elements. In our hotel in Hangzhou, though, at least 20% of our clientele are foreign. Like I said, we don’t do any marketing, so all of those overseas visitors came by word of mouth.
Why did you choose the name Orange? Again, the inspiration came from the Apple brand. We thought “Hey, why can’t we be an Apple hotel? Or a Peanut hotel?” There were a lot of other ideas but we finally settled on orange. We felt that orange was just bright and lively, young and energetic, and this is how we think of our hotels. It also stands out because the name, Orange, and what it is, a hotel, don’t usually go together. Since it contrasts, this also makes it easier to remember.
When did you come to Beijing? I first moved to Beijing from the countryside in 1987 to go to college. I think my parents expected me to become a government official but apparently I found a different path. Since then, they’ve moved here to join me.
What do you like to do around the city? In my spare time, I do a lot of reading. I like reading The Economist and other magazines to practice my English. Sometimes I even read them out loud. I also love meeting new people, especially those working in the architecture field. I like hearing about what’s new in the industry and learning more about it. As far as favorite places to go, my favorite restaurant is Yuelu Shanwu (岳麓山屋) . Since I am from Shanxi province, I like spicy food. I go there pretty often when I miss home.

Interview by Sarah Isabel Lavers

Learn more about Orange Hotels at www.orangehotel.com.cn.

Yue Lu Mountain Dining11am to 11pm. Jizhuangli Building 1, 10 meters west of Hotel G (6551 0806) 岳麓山屋 朝阳区吉庄里1号楼

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