Shanghai, June 17 (Xinhua) -- As "destination" vacation tourism becomes the consensus of the industry, more and more domestic and foreign hotel brands are accelerating the layout of the "sinking market" outside the mainland's first- and second-tier cities.
The reporter's recent investigation found that since the beginning of this year, many domestic and foreign hotel groups have issued targeted expansion plans, and are committed to improving the service level of accommodation products in the "sinking market" through digitalization and chaining. Industry insiders believe that the hotel chain degree in third- and fourth-tier cities and below is not high, the operation is relatively loose, and most of them are independent hotels, which has greater market potential to be tapped for large hotel groups.
Domestic and foreign hotel groups accelerate the layout of mainland "sinking market"
Mao Yibing, president of Marriott International's Greater China region, said that this year, the group expects to open nearly 47 hotels in nearly 30 destinations in China, and will welcome the 500th hotel opening in the Chinese market.
In April this year, IHG announced the signing of 24 new hotels, most of which are franchises, involving InterContinental Hotels Group's voco hotels, EVEN Hotels and Holiday Inn Express brands, mainly located in North China, East China and the Guangdong-Hong Kong-Macao Greater Bay Area, covering a number of key cities and tourist destinations. "China has become the Group's fastest growing market in the world. In the context of increasing tourism consumption and seeking high-quality development of the cultural tourism industry, we have noticed that mid-to-high-end hotel brands with outstanding quality also have great potential in third- and fourth-tier cities. Therefore, we hope to continue to expand and sink through the franchise model, and carry out forward-looking and diversified destination layout. Jian Sun, Chief Development Officer, Greater China, IHG, said.
"Huazhu proposed measures to target the 'sinking market' in 2019, and we are pleased to see that this has become the consensus of the industry in recent years." Jin Hui, CEO of Huazhu Group, said in an exclusive interview that as of the first quarter of this year, the number of hotels operating in China was 8,464. 39% of the hotels in operation and 56% of the hotels to be opened are in third- and fourth-tier cities and below, the number of hotels in operation increased by 2 percentage points, the number of hotels to be opened increased by 1 percentage point, and the number of urban coverage increased to 1,132. "We hope that in the next 5 to 8 years, the scale of the 'sinking market' will at least double from the current level, and we can achieve 'county has Huazhu'."
Xiao Bo, vice president of Jin Jiang Hotels (China), said that most of the newly signed hotels and newly opened hotels in Jin Jiang Hotels (China) in the first quarter of this year are concentrated in mid-market brands, and most of them are distributed in the "sinking market". For example, Kyriad Hotel, as an international hotel brand under Jin Jiang Hotels (China), after entering China, after six years of development, as of May this year, the scale of the Chinese market has reached 412, becoming the fastest growing international hotel brand under Jin Jiang Hotels (China) and Louvre Hotel Group in France. In the first quarter of this year, most of the newly signed projects were distributed in the "sinking market", and the proportion of operating stores in the "sinking market" was 48%.
Digitalization and chaining empower "sinking market" and accommodation industry "consumption upgrade"
In the view of many industry insiders, the "sinking" of the market does not mean that the quality of service "has declined". With the continuous promotion of chain ownership by large hotel groups and the introduction of high-quality services and standards into the "sinking market", the accommodation industry in third- and fourth-tier cities will usher in new transformation and upgrading.
Meituan data shows that from 2019 to 2023, the hotel chain rate in first- and second-tier cities has reached 33%, while the chaining rate in third-tier cities and below is only 18%.
In the view of the relevant person in charge of Meituan, economy hotels are the mainstream hotel type in the "sinking market", especially all kinds of independent hotels are in urgent need of new development. According to Meituan's estimates, the number of domestic economy hotels will grow to 500,000 this year. Divided by 70 rooms, about 15% of large hotels with more than 70 rooms are small and medium-sized hotels. The chain rate of large hotels is stable at more than 40%, and the chain rate of small and medium-sized hotels is still stuck at about 8%.
"With the improvement of people's living standards, as well as the implementation of policies such as rural revitalization and expanding consumption, all aspects of clothing, food, housing and transportation have ushered in the market demand for 'high-quality development'." Jin Hui said that based on this judgment, Huazhu has accelerated its layout in two aspects: First, it has further promoted digitalization and chaining. For example, the launch of "Easy Security" combines traditional alarm services with the Internet of Things, enabling stores to quickly identify 47 emergency safety situations such as fire protection; Set up the "Hua Shop" hotel front desk terminal in each store to achieve "30 seconds check-in, 0 seconds check-out"; "Huaxiao AI" can assist manual customer service to answer room calls, and realize automatic intelligent outbound calls, helping guests complete automatic confirmation in scenarios such as room extension and debt collection and reporting. The second is to focus on improving the supply of personalized and non-standardized businesses. For example, in Hanamado, targeted service improvements have been made for pet-friendly and parent-child consumption. In Jinhui's view, unlike the traditional accommodation or business travel market, the vacation market is more focused on experience, so Huazhu has carried out many collaborations with local lifestyle brands.
The picture shows the lobby of Huazhu's Orange Crystal Shanghai Lujiazui Financial Center Hotel (Photo by Xinhua News Agency reporter Zhang Lei)
"Behind the remarkable achievements of brand development, we emphasize lean development, through local localization and deep cultivation around the brand strategy, choose the right property to match the positioning and quality requirements of the brand, and deeply explore development opportunities and growth space." Xiao Bo took the Kyriad Hotel under Jin Jiang as an example to introduce that in view of the characteristics of China's hotel market, it has changed its development model in overseas markets to hard standards, and has launched V3.0 products that meet the needs of today's young people after many iterations, creating a five-dimensional differentiated experience space for food world, craft brewing culture, travel life and sleeping harbor. In addition, a variety of guest control methods such as voice commands, Rubik's Cube induction and traditional mode are also set in the guest rooms to meet the habits of different groups of people using smart devices and enhance the experience of guests.
Zhao Huanyan, Chief Knowledge Officer of Huamei Hotel Consultants, believes that the economic development and consumption improvement of third- to fifth-tier cities are opportunities for the development of the hotel industry in the "sinking market". Chain brands have advantages in terms of customer sources, and can form brand awareness and attractiveness on the basis of focusing on building brand flagship stores, and achieve rapid development. (Participants: Cui Lu, Wang Yangang, Li Yujia, Jia Yunpeng, Xu Tan)