Exclusive Interview With Tang Ming, President Of Shimao Xida Hotel Group

"This epidemic has forced hotels to make innovations. I think it's very good. If you don't know your future customer groups after 90 and 00, they will not get good results in the end."

Recently, several domestic hotel giants have announced the first half of this year's financial report, the data is not very optimistic. Jinjiang Hotel realized a consolidated operating income of 4.090 billion yuan, a year-on-year decrease of 42.74%, and a net profit loss of 378.1 million yuan, a year-on-year decrease of 205.68%. The net loss of non travel companies decreased by RMB 31.07 billion. Wanda hotel's revenue in the first half of the year was HK $246 million, a year-on-year decrease of 37%, and a net profit loss of HK $33.517 million.

Although the world trade hotel has not been listed separately, it has disclosed in Shimao shares that the revenue of its hotel business segment is 327 million yuan, down 53.02% year-on-year. As for profits, "we made a profit of more than 30 million yuan in the first half of the year." on September 10, Tang Ming, vice president of Shimao Group, chairman and President of Shanghai Shimao Hotel Management Co., Ltd., and President of Shimao Xida hotel group, revealed in an exclusive interview with the 21st century economic report that the company responded quickly during the epidemic period, actively adjusted its business strategy, provided characteristic services and actively tried to include live broadcasting A variety of marketing methods, so that the performance gradually recovered, and ultimately more than 30 million yuan of profit.

Tang Ming revealed that Shimao hotel management company had a target profit of 400 million at the end of the year. How would he turn a stone into gold?

Tang Ming. Information map

Strain and change

"21st century": in the first half of this year, many hotels were affected by the epidemic, and their performance was poor. How about the operation of Shimao hotel?

Tang Ming: we had a quick response and made adjustments at the initial stage of the outbreak. On the one hand, to ensure the hotel service operation prevention and control, to avoid the impact of guests. In addition, we made adjustments in terms of operation: we operated at the lowest cost in February and March to reduce losses as much as possible; after the market began to recover in April, we made new sales attempts in advance, such as live broadcast on Twitter and wechat mall. At the same time, the epidemic also shows us business opportunities. The hotel needs to create some new products and scenes to meet the needs of customers, so we have launched a lot of product combinations suitable for weekends and summer holidays. For example, in the first quarter, we launched a 7-day service to satisfy customers who are willing to be isolated. Under the background of stagnant domestic tourism, weekend leisure products were launched in April, may and June to attract local customers.

7. In addition to the price strategy and the characteristic tourism products similar to the integration of food, housing and entertainment, the key to the recovery of performance in August is the addition of many new sales channels, including live broadcast, wechat mall, super brand day activities and so on. In this regard, we have tried earlier and more comprehensively.

Therefore, it has basically recovered to 30% of the same period last year in April and 85% in July and August. The performance of Shimao pit hotel in August even exceeded 30% of the same period last year.

21st century: you mentioned the marketing means of live broadcast. We found that many companies are trying. What do you think of live broadcasting?

Tang Ming: I think it will be a normalization need. Because live marketing has become a way of life, even if it has not been sold, the audience has reached an advertising effect, and it is free advertising without paying commission. In addition, the audience who watch the live broadcast comes with demand and is our direct customer. Live broadcast also has many synergy effects, such as promoting the purchase of customers who would not otherwise place an order. In addition, affected by the epidemic situation, people have become accustomed to buying online. If they are not satisfied, they are also attracted by the way of returning goods, which is very flexible. However, this new retail mode is not the only one. Hotels also need to match and do according to different seasons, customer groups and market conditions.

This is also what I want to express. Sometimes, China's hotel industry is more traditional in terms of sales, and is not willing to do cross-border innovation. This epidemic situation forces hotels to make innovations. I think it's very good. If you don't know your future customer groups after 90 and 00, they will not get good results in the end, so we will continue to try.

Domestic demand for gold

21st century: what are the goals and plans of Shimao hotel this year?

Tang Ming: in the first half of this year, the whole Shimao hotel sector made more than 30 million profits. Our target revenue is 1.8 billion, 75% of the same period last year. Compared with the previous 30% profit margin of the owners, we set it at 22.5% this year and expect to achieve the target profit of 400 million yuan.

21st century: so high? I'm curious how you're going to get there. How do you judge the market situation in the remaining few months?

Tang Ming: we hope that September, November and December may return to 90% of the same period last year. There will be an explosive growth in October, even a little more than the same period last year. Therefore, we are arranging in advance, such as price adjustment and service feature creation. Although some people still have a wait-and-see attitude towards the annual meeting market in November and December, I am still optimistic.

I think it is mainly domestic demand. Therefore, the holiday market must be well done, and product features should be made through market segmentation. Second, since the second half of this year, international tourists are limited, so we should focus on developing local business. After half a year's adjustment, we should do a good job in the business market under the background of domestic demand in the first half of next year. Even if this situation continues into next year, there are still positive factors in the holiday market. Because China's 150 million overseas tourism market will be transferred to China last year, the potential of the consumer market is great. In addition, due to the impact of the epidemic, there are only 450000 hotels in Ctrip, a decrease of 100000 compared with the same period last year. With the market expanding and supply decreasing, this means there are many opportunities next year. We have to take advantage of our own service, so we have to take advantage of our own service.

But there are also difficulties in the second half of the year, as I stressed in our company: make two preparations with one heart. The guest department, sales department and operation Department of the hotel should be prepared to deal with the situation of full guests at any time. Sales should not be lax, looking for the possible market of the annual meeting, but the personnel, financial, purchasing and other departments should make the worst plan. Assuming that the repeated epidemic situation and the uncertainty caused by Sino US relations to the international environment, international business may be lost. Therefore, it is necessary to increase revenue and reduce expenditure to maximize revenue. This goes back to what I emphasized before: to make Shimao the most profitable Hotel, this is our operating philosophy.

21st century: you mentioned that the domestic demand economy will promote the holiday market. Will the previous plan be adjusted according to market changes? Will it speed up the development of holiday market?

Tang Ming: I think so. Shimao was originally positioned in the first and second tier cities, and its layout was also focused on the holiday market. Under the crisis mood, coupled with its optimistic view of the holiday market, the development will be accelerated. In fact, from the overall point of view, the impact of the epidemic situation is not big. The only change is that the opening speed has slowed down, but the signing speed remains very good.

16 projects were signed in 2017, 30 in 2018 and 40 in 2019. This year, we have adjusted to guarantee 40 and flush 50. At present, we are still very likely to complete it. And the quality of the hotels we sign up for every year is also improving. From small-scale enterprises to small-scale enterprises, they even went back from the first tier to the fourth tier.

In addition, I think the epidemic provides two opportunities for development. First of all, with the withdrawal of 100000 single hotels under the epidemic situation, the benefits of chain brands will increase. China's hotel chain brand rate is only more than 20%, compared with 85% in foreign countries, which will be an opportunity for brand chain companies. Second, the outbreak shows that the response speed of domestic hotel management companies is much better than that of international management companies. Many hotel companies with management headquarters in Europe and the United States do not understand the Chinese market, and the decision-making process will be very long. In addition, affected by the uncertainty of the international situation and the emphasis on self-confidence in national culture in China, many companies will choose to cooperate with national brands. As a national brand, we still have advantages in this respect.

21st century: what are the characteristics of the hotel layout you have signed up for?

Tang Ming: the layout is divided into two parts. When the first Shimao hotel was built, it was expected that 80% of the services would be selected, that is, the middle end and the high-end, and 20% would be the high-end. But in the past three years, we have found that we have a good reputation in high-end hotels, so these 100 hotels are exactly 50% of high-end full-service hotels and 50% of selected hotels.

In addition, about 51% of us are in the first and second tier cities, 30% in the third and fourth tier cities, and the rest are in some tourist attractions. In the future, the largest proportion of overseas distribution will be 5% - 10%, and this proportion will not change. Because we are expanding overseas to represent Chinese brands, we can't just have the quantity, but the word-of-mouth is very poor, or the geographical location is not good and we can't make money.

Therefore, we are also very cautious when we invest abroad and choose some good destinations such as Bali. Only by doing the brand, can we do a good job of hotel profit, which is what we should always adhere to.

In recent years, there are fierce competition in the high-end hotel industry. How do you think there are fierce competition in this industry?

Tang Ming: Yes, medium and high-end hotels have developed rapidly in the past few years. When Shimao Hotel started to operate direct stores, the market was blue ocean, and now it has become a red sea. To some extent, the market has been saturated, reached the bottleneck of industry development, and investment has gradually slowed down. This is mainly due to the drastic development in the past, which makes the rent irrational, and it is possible to lose a lot of money if we continue to invest. It is a good thing that the rent has been reduced by the epidemic. Controlling the rent within a reasonable range will make the whole industry more rational.

In addition, reorganization and integration is certain. In this process, chain brands will have advantages and small hotels will be integrated into big brands. I think it is a trend.

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