Research Unveils Chinese Travelers’ Changing Lifestyle, In Line with Canopy by Hilton’s Debut in China

BEIJING, China and MCLEAN, Va. - Hilton (NYSE: HLT) today revealed results from consumer research projects[1] undertaken by global information and measurement houses, Kantar and Nielsen. By exploring Chinese consumers' mindset and their rapidly-growing appetite for quality travel experiences, the research paves the way for the introduction of the new Canopy by Hilton brand in China in order to meet rising local demand for lifestyle-driven tourism. The insights were released today in a Beijing press conference and demonstrate Hilton's commitment to innovation based on customer engagement.

Chinese Travelers Pursue a Distinctive New Lifestyle
As China's expanding economy shifts from an export and investment-led model to one of consumption and services, the country's tourism sector continues to experience a major boom. The number of domestic tourists reached 2.83 billion in the first half of 2018, up 11.4% year-over-year, while outbound travelers surged 15% over the previous year to hit 71.3 million, according to the China Tourism Academy.[2] This comes hand in hand with Chinese travelers' changing preferences: they now value experiences over obligatory visits to landmarks and are more willing to spend on local dining and cultural activities.

Through a survey of 1,000 Chinese citizens across different age groups and regions who have stayed in an upscale hotel at least once, the Kantar study identified four new key traits that have emerged amongst today's Chinese travelers:

1. 83% of respondents are "keen to explore" different local cultures
2. 82% enjoy "self-pampering"
3. 77% are "open" to socializing with locals
4. 77% are "self-expressive" by seeking out new experiences

These traits demonstrate an appetite to dive deep into local culture and pay a premium for rewarding experiences. Travelers also expect hotels to feature a blend of culture, comfort, socialization and personalization. Additionally, they seek places where unique spaces, special gourmet experiences and customized services come together to define a distinctive lifestyle.

The survey also captured three common mindsets among Chinese travelers:

1. They "work hard and play harder", with 67% of respondents opting to live in the moment and seeking instant gratification to quickly recover from the hectic pace of work. At the same time, 54% of respondents seek out hotels that can offer an "invigorating experience".
2. 69% label themselves as the "me generation" who thrive on being in the limelight, with strong desire to express their identity. Correspondingly, they relish opportunities to be visible, including through socially shareable visuals; 50% said they prefer hotel walls to be curated with local items and 48% favor unique and stylish design decorations.
3. They are happy with moments of simple bliss. 63% refer to the importance of thoughtful, personalized perks over opulence, while 50% said they care about how hotels attend to their everyday lifestyle needs.

"Bolstered by higher disposable income, wider international exposure and easier accessibility of travel, Chinese consumers are more confident in exploring new destinations and looking to gain new experiences when they travel. By understanding their evolving needs through these studies with two world-renowned institutions, Kantar and Nielsen, Hilton is able to deepen our connection with guests and present innovative offerings - including our Canopy by Hilton brand - that focus on their tastes and preferences," said Gary Steffen, Global Head, Canopy by Hilton.

Neuroscience Confirms Canopy by Hilton's Resonance in China
Canopy by Hilton was thoroughly researched to fill a void in the marketplace. The brand debuted in China with the opening of Canopy by Hilton Chengdu City Centre to deliver an experiential, neighborhood-centric hotel category to fulfill Chinese travelers' needs.

In a novel approach to localizing the brand experience, Canopy by Hilton partnered with Nielsen to test consumers' emotional responses toward the brand through cutting-edge neuroscience. By monitoring brain activity through EEG sensors and tracking eye movements to pinpoint hot zones on what a consumer is noticing, Nielsen was able to identify with precision qualities or offerings that were most effective in engaging consumers' attention, emotions and memories. In particular, the study found that Chinese consumers responded positively to the idea of a "thoughtfully local" offering, where the hotel serves as an extension of the neighborhood and offering a taste of the surrounding locale through distinctively local designs, food and drink, partnerships and more.

Specific propositions that stood out include:

• "A showcase of local artists' work within the hotel" encompasses numerous aesthetic and stylistic touches within the hotel that allude to Chengdu's history as a meeting place of arts and commerce along the Silk Road.
• "Focus on thoughtful details" evokes attention to simple, thoughtful touches that leave a lasting impression and integrate seamlessly into guests' experience. For instance, in Chengdu, Canopy by Hilton offers guests a pack of mahjong pieces with orange-colored Canopy design on the back as welcome gift. This celebrates the cherished local tradition of playing the game with friends, families or even business partners.
• "Bicycles available for complimentary loan to explore the locality" notably evoke a leisurely mood and appeal to Chinese consumers who wish to get away from their busy lives.

"These neuroscience consumer tools provide greater precision and predictability than conventional survey methods by understanding people's conscious and non-conscious responses. Our study has affirmed that Canopy by Hilton's brand promise of a "Positive Stay" and forward-looking local concepts resonate well with Chinese consumers and live up to their expectations of an ideal travel experience," said Tina Ding, Vice President, Neilsen China.

Strong Global Growth
Following the opening of Canopy by Hilton in Chengdu, the brand has no intention of slowing down, with an aggressive pipeline of more than 30 hotels scheduled to open globally, with locations including Paris and London, in the next six years. As well as the recent opening of Canopy by Hilton Chengdu City Centre, forthcoming launches in APAC include Canopy by Hilton Hangzhou Jinsha Lake, opening in late 2019, and Canopy by Hilton Kuala Lumpur Bukit Bintang, opening in late 2021. Such growth momentum is set to enhance Hilton's position in consumers' mind as a vibrant and lifestyle-oriented brand.

"The launch of our innovative lifestyle brands in China underscores our commitment to deploying our brands thoughtfully and strategically to serve any travel need our guests may have," said Alan Watts, Executive Vice President & Regional President, Asia Pacific, Hilton. "Canopy by Hilton, with its emphasis on authentic experiences in the neighborhood and guest-directed service, will delight guests in new ways each time it arrives in new destinations with locally inspired offerings."

[1] The research was conducted by Kantar on behalf of Hilton, with 1,000 respondents aged 20-45 in Mainland China between 01.12.2018 - 10.12.2018. The survey was conducted from a rando sample of China travelers. KANTAR abide by and employ members of the Market Research Society which is based on the ESOMAR principles.

[2] 22 Aug 2018, The State Council Official Website, Major tourism economic data report for the first half of 2018