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    Sinking: A New Way Of "Nuggets" In High-End Hotels

    2019/12/28 11:07:00 0

    SinkingHigh-End HotelsNuggetsPaths

    Although the sinking of the three or four tier cities is not "plain sailing", it has become a new source of power for the development of high-end hotels.

    According to the data from the National Tourism Administration, the total tourism revenue in 2016 -2018 was 4 trillion and 690 billion yuan, 5 trillion and 400 billion yuan and 5 trillion and 970 billion yuan respectively, representing a growth rate of 15.14% and 9.55% respectively. Despite the growth trend of the industry as a whole, slowing growth has become an imminent challenge. In recent years, the growth rate of mid - end chain hotels is much higher than that of economic chain hotels. According to the forward-looking Industry Research Institute, in 2016 -2018, the growth rate of China's mid - end chain hotels was 15.73%, 31.43% and 32.6% respectively, while the scale of the Econo Hotel increased by 7.27%, 9.95% and 11.2%. The growth rate of the middle end chain hotel is obviously higher than that of Econo Hotel.

    In the middle and high-end hotels, the market of first and second tier cities is becoming saturated, and the three or four line has become the main expansion place of the market. Not only the domestic hotel group, but also the international brand hotels also sounded the clarion call for China's three or four line market. Among them, the franchise mode has become the mainstream mode of developing high-end hotels brand in China.

    Intercontinental hotels, Wan Hao, Hilton, Accor, Hyatt and other foreign hotels have chosen to open the franchise, outsourcing the management of people, property and goods to the third party property companies. Because of the hotel's own high-end brand holdings, when choosing the property, they often choose the good property of the first tier city to provide the best operation and management to the hotel.

    However, in recent years, with the gradual saturation of high-end hotels in the first tier cities, the international brands can see better and fewer properties, and the three or four line is once again "shouldering heavy responsibilities".

    In the process of accelerating the sinking of the three or four tier cities, the franchising mode of chain hotels is also facing many problems -- the differences in management concepts, the difference in talent cultivation mode, the localization challenges of three or four lines of cities, and the trade-off between user experience and other issues have become problems in the sinking of high-end hotels.

    In the middle and high-end hotels, the market of second tier cities tends to be saturated, and the three or four line has become the main expansion place of the market. - Song Wenhui photo

    Nuggets three or four line cities

    Both high-end hotels and Econo Hotel are constantly expanding their business. Hotel business, high-end hotels "down", Econo Hotel "up", the high-end market has become the focus of competition, and the hotel layout, without exception, are competing for the three or four line city.

    After experiencing the development of "golden ten years", Econo Hotel has entered the high-end market. Take the Jinjiang group as an example, its Li Feng Hotel and zhe hotel are the representatives of the middle and high-end market, and have been developing rapidly in 2018. And the first and second tier cities have less and less space for the Econo Hotel, and Econo Hotel is also actively pursuing the development of the three or four tier cities.

    The middle and high-end hotels will not let the cake sink.

    Hotel Group's high-end hotel project as a large-scale tourist town project, a well-known tourist attractions supporting synchronization. Earlier, insiders said that for some of the more developed three or four line cities, high-end hotels could even play a role in enhancing the overall value of the region. In addition, considering the large scale high-end activities held in all parts of China, the demand for high-end hotels in the three or four tier market is also relatively stable.

    Take InterContinental Hotel as an example. As of June 30, 2019, about 3/4 of the 422 hotels in the Greater China region are located in two or three and four tier cities. About 387 of the 387 hotels under construction are located in two or three and four tier cities. Compared with Hilton's Huan Peng hotel under the platinum group, its official website shows that there are 109 stores in China, including 12 in the north and 89% in the two or three and four tier cities.

    Sinking to the three or four tier cities is actually the trend of development.

    For a long time, hotels in China showed "Pyramid shape" in terms of quantity and scale. "2018-2019 China hotel industry development monitoring and business investment decision analysis report" shows that at present, high-end hotels in China's hotel industry account for 7.4%, middle end hotels account for 28.6%, economic chain hotels account for 21.1%, and other hotels account for 41.9%.

    Compared with developed countries such as the United States, there is still a gap in the status quo of the industry. At present, the United Inn industry presents a "spindle shaped" high-end and less economic type, with more middle end hotels. Now, the domestic hotel industry structure is changing from "Pyramid shape" to "spindle shape", and the demand for middle end hotels is also more urgent.

    Qiu Yu, director general of the InterContinental Hotel Holiday Inn group and the head of hotel business division of Greater China, told the twenty-first Century economic news reporter: "whether the high-end hotels are overweight or the three or four line (cities) sink, this transformation is the general trend. Because consumer groups have changed, there are more and more middle end consumer groups, and there is an urgent need for consumption upgrading, thus driving the transformation of hotels.

    In fact, in addition to the widely known three or four line cities, the stock market of some "net red" five or six line cities also needs to be excavated.

    At present, there are many five or six line cities in China, such as Yunnan, Tibet and so on, through tourism. This is also a good news for the hotel industry. If the transportation and other infrastructure problems are solved, the demand for local tourism will increase substantially, thereby stimulating the layout of high-end hotels in the local area.

    Qiu You told the twenty-first Century economic news reporter that InterContinental Hotel has already opened to five or six more developed cities in Daocheng, such as Aden and Xi Cang. And with the further development of tourism in the five or six tier cities, more and more hotels will be stationed in the future.

    Coincidentally, platinum Tao Group official website shows that its Hilton Huan Peng hotel has been stationed in Panzhihua, Sichuan. "Sinking and sinking" has become the key word of the high-end hotel pioneer.

    Localization challenge

    In the process of sinking, high-end hotels are faced with a series of localization problems, such as hotel uniform standards and local characteristics, price and local consumption level.

    The franchising mode of chain hotels can often rely on the resource background of the hotel, greatly reducing the preparation and preparation time. Insiders say that a hotel usually takes about two years from signing to opening, and the operation and preparatory period will take about six months. This period includes the construction of hotels, training of employees, and training of management personnel.

    Some hotels, relying on their own decades of development platform, already have a relatively complete personnel training system. Xu Naiqiang, President of Shanghai Cotai power Limited by Share Ltd and owner of Shanghai Hui Jin Zhi Holiday Inn (intercontinental), told the twenty-first Century business reporter that the general manager of the hotel must be trained and eventually bring the hotel's standards and ideas into it. Therefore, it is the key to ensure that the leader recognizes and profoundly implements the hotel culture. Some hotels even launched the "future general manager plan". For tourism majors, after 5~6 years of training, they became the general manager of a hotel, to some extent, a powerful measure to ensure corporate culture.

    In addition, the localization of international hotels is also facing challenges during the sinking process. This "localization" includes two aspects: one is the localization of prices, the other is the localization of services. Two.

    A high-end hotel costs thousands of dollars a night, but it still makes it difficult for most of the three or four tier cities consumers to afford it. In the process of localization, will the high-end hotels make concessions in terms of price and guarantee the passenger flow at a lower price? Qiu You told reporters in twenty-first Century economic report that the three or four tier cities' sinking is more "cost-effective" and can not be decided by price alone.

    He said that entering the dilemma of low price competition is actually unfavorable to the development of the local hotel industry. A better healthy competition mode will make local hotels continue to do well in their services, do their own brands well, and increase the "cost performance" of hotels, so that people feel that the service is worth so much money. In this benign competition mode, the price of hotels may not rise and fall, but will not fall into the vicious circle of price war.

    The trade-off between "standardization" and "localization" of hotel services is also a problem to be faced in the process of sinking.

    In terms of consumption mode, foreign hotels mainly offer business and holiday based consumption, providing special catering, entertainment fitness, cultural experience and other services. The high-end hotels in China are mainly conference type and banquet type, which lack experiential consumption activities. Therefore, the loyalty of domestic hotel customers is generally not as high as that of international hotels.

    Then, in the hotel culture and the provision of catering, services, according to a unified international standardization or according to the local characteristics of adjustment has become "must topic".

    According to Qiu You, from the perspective of brand standards, they will try to be consistent.

    That is to say, we must ensure that our corporate culture will not be lost. On this basis, give owners more choices and freedom. For example, the construction of public areas in hotels, hotels in the center of the city tend to be business oriented, while hotels in tourist areas are biased towards natural winds, which can be left to the owners to decide. In hotel facilities and catering, there are more specific criteria, such as what kind of entertainment services are provided in hotels, what kind of food supply and production processes to achieve. On this basis, we will further localize the special services.

    At present, many hotels often emphasize how many hotels are open in a few years when they sink. But in fact, in the process of sinking, "quality" is more important than quantity. Especially in the franchise mode, there are many different owners waiting for cooperation with high-end hotels. In this case, it is particularly important for the owners to have the ability and the resources to be screened. In the process of sinking, we should not simply "spread out", but rather find a balance between high speed development and high quality service.

    Besides, when international brands enter China, they can provide some ideas for the development of China's mid-range hotels. For example, the global membership system is the advantage brought by international brands. Many international hotel members are global, so that customers will choose chain brands when traveling at home and abroad. For foreign customers, they will also choose chain hotels in China. Xu Naiqiang told the twenty-first Century economic news reporter that at present, the domestic Holiday Inn has about 10%~20% customers as foreign guests and has a great relationship with membership.

    Chain is still far away.

    But in the high-end hotel market, although the total supply base is relatively high, compared with overseas markets, it is still at a relatively low level of development, a large proportion of which comes from the low degree of chain.

    For the hotel industry in developed countries, the development of chain hotel industry in Europe and America is relatively mature due to the early start. STR (Smith Travel Research) data show that as early as 1990, the chain of United Inn industry has reached 46%. After 2016, the chain of United Inn reached about 70%. At present, the chain rate of China's hotel industry is only about 20%. This is not only a big gap compared to the United States, but also a big gap compared to the nearly 50% rate in the Asia Pacific region.

    The reason is that on the one hand, the macroeconomic environment is stable, and the supply of the hotel industry is not as clear as that of the United States. The two is that the domestic consumers' brand awareness is relatively weak.

    Insiders said that Avenir Hotel brand will become an important factor in hotel consumption, which will also promote the development of domestic chain hotels. Hotels are well aware of this, so many hotels are now throwing money to build membership systems, including the addition of points, concessions and other members' interests, in order to increase user stickiness. In this way, customers will be more likely to choose hotel chains if they are in the field or even abroad.

    In view of the lack of brand competitiveness and the lack of unified management, the monomer hotel shows the characteristics of "weak, scattered and poor" in the market transformation. As a result of the fact that single hotels are dispersed independently in various regions and lack the motivation and conditions for developing market space across regions, they are weak in resisting risks and are easy to be eliminated in market transformation.

    At present, the development of chain hotels in China presents a situation of tripartite confrontation. First brigade such as home, Hua Hua and Jinjiang three groups live in the top three of the domestic chain hotel industry. In terms of market stocks, the low-end areas have been saturated, and the middle and high-end fields will become the main battleground of chain hotels in the future.

    In addition, the trend of future chain will be more differentiated. For example, the theme hotels such as lovers hotels and electronic competition hotels are beginning to show. In recent years, the platinum group launched by platinum group has positioned the core customer group in the new era, providing SPA, nail and other services more inclined to women. The industry believes that looking forward to the future, there will be more subdivision of hotel products to meet the different needs of different groups of customers.

     

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