At the end of last year, the 60 full-service hotels that were just acquired in the arms will contribute 159 million yuan of operating income to the listed company Jin Jiang Hotels in 2023. According to the "5 points" commission ratio revealed by the staff of Jin Jiang Hotel, the turnover of the above 60 hotels can be roughly inferred to be about 3.2 billion yuan.
Jin Jiang Hotels mentioned in its financial report that the company's existing full-service hotel operation and management business includes the operation and management of high-end hotels, ultra-high-end hotels, luxury hotels and high-end luxury hotels. In terms of business model, it is mainly divided into two types: "discretionary management" and "franchising".
So, from the point of view of performance, can Jin Jiang Hotel operate the above-mentioned high-end hotels up to standard? Behind this, what stage has Jin Jiang Hotel's brand combing and integration reached? At the same time, after the SASAC has included market value management in the assessment of the person in charge of central enterprises, will it be expanded to the field of large state-owned enterprises in the future? This may be a new KPI for Jin Jiang Hotel, whose stock price is weak.
With the addition of 60 full-service hotels, how are they doing?
According to the 2023 financial report disclosed by Jin Jiang Hotels, "full-service hotel operation and management business" has become one of the company's main businesses.
According to the financial report, in 2023, Jin Jiang Hotels will add 60 full-service hotels with a total of 18,870 rooms.
"Wine Management Finance" called the securities department of Jin Jiang Hotels as an investor, and the staff said that the above 60 hotels were all stores under Jin Jiang International Wine Management acquired at the end of last year.
At the end of November 2023, Jin Jiang Hotels announced that it intends to acquire 100% of the equity of Jin Jiang International Hotel Management Company held by Jin Jiang Capital by way of transfer agreement.
Jin Jiang Hotels revealed in its financial report that among the 60 full-service hotels, there are high-end hotels, ultra-high-end hotels, luxury hotels and high-end luxury hotels. The business model mainly includes "discretionary management" and "franchising".
In general, the form of discretionary management refers to the fact that the company takes over the operation and management of the hotel by signing a hotel management contract with the owner company, and collects basic management fees and incentive management fees from the entrusted management hotel.
The form of franchise refers to the fact that the company licenses the company's brands, registered trademarks, systems and other business resources to the licensed hotel within the agreed period of time by signing a franchise contract with the hotel owner, and collects franchise fees from the licensed hotel, and the permitted hotel operates the hotel under the guidance of the company.
In Jin Jiang Hotel's 2023 financial report, the operating income of the full-service hotel operation and management business was 159 million yuan.
The staff of the securities department of Jin Jiang Hotel said that 159 million yuan is not the turnover of 60 hotels, but the relevant management fees charged by the company. This rate is relatively low, usually around 5 points, and the rate is not the same for each hotel.
If you roughly extrapolate at a rate of 5 points, the turnover of the above 60 full-service hotels in 2023 will be about 3.2 billion yuan.
"Wine Management Finance" noted that Jin Jiang Hotels also disclosed the specific operating data of its full-service hotels in the financial report. From January to December 2023, the average room rate of full-service hotels is 529.74 yuan/room, the average occupancy rate is 53.52%, and the PevPAR is 283.52 yuan/room.
Based on this calculation, in 2023, the revenue of 18,870 rooms of 60 hotels will be 1.953 billion yuan. It should be noted that room revenue is only a part of the revenue of high-star hotels. Combined with the proportion of room and catering revenue of mainland star hotels in each quarter of 2023, we roughly estimate that the proportion of room revenue is 45%: in 2023, the revenue of Jin Jiang Hotels' 60 high-star hotels will be 4.3 billion yuan.
Jin Jiang Hotels did not disclose the names and locations of the 60 hotels. However, according to the information of previous acquisitions, Jin Jiang International Wine Management Company manages 76 star-rated hotels in 35 cities across the country, including 40 five-star hotels and 32 four-star hotels, and operates and manages brands including J Hotel, Rock Garden, Jinjiang and Kunlun. There is no shortage of ultra-high-end and luxury hotels.
Choose the highest value among the above two figures: 60 high-end hotels achieved 4.3 billion yuan in revenue last year. The outside world was able to get a glimpse of Jin Jiang's management capabilities and empowerment in full-service hotels.
In fact, the revenue capacity of a full-service hotel is closely related to the city and location in which it is located. Taking Atlantis Sanya, a subsidiary of Fosun Tourism, as an example, the hotel will achieve a turnover of 1.68 billion yuan in 2023, with an average daily room rate of 2,386 yuan and an average occupancy rate of 82%.
"Wine Management Finance" noted that KWG Group, which also operates a high-end hotel business.
According to relevant information, the group has developed 26 high-star hotels, including international hotel group cooperation and self-owned brand hotels, distributed in Beijing, Shanghai, Guangzhou, Chengdu, Suzhou, Hangzhou, Chongqing and other core cities. For example: W Hotel Guangzhou, W Hotel Chengdu, Conrad Hotel Guangzhou, Four Points by Sheraton Guangzhou Dongpu Hejing, Courtyard by Marriott Suzhou Hejing, etc.
According to KWG Group's financial report, in 2023, the company's hotel operation business revenue will be 830 million yuan.
In addition, according to the 2019 national star-rated hotel statistics report, there were 822 five-star hotels in mainland China that year, with a total revenue of 81.4 billion yuan, and the annual revenue of a single five-star hotel was close to 100 million yuan.
In this way, although Jin Jiang Hotels' products are mainly economy and mid-range, it still has a certain competitiveness in operating full-service hotels.
How to be "big and strong"?
Longitudinal comparison to find results. Overall, Jin Jiang Hotel's report is quite eye-catching in 2023. By the end of 2023, the company has opened a total of 12,448 hotels and a total of 1190674 hotel rooms. In terms of revenue, it increased by nearly 3% year-on-year to 14.65 billion yuan, and net profit exceeded 1 billion yuan.
Horizontal comparison to find gaps. In 2023, in addition to being ahead of Huazhu in terms of store scale, Jin Jiang Hotels will lag behind the latter in terms of specific operating indicators.
According to the financial report, in 2023, Huazhu's occupancy rate, ADR, and PevPAR will be 81.1%, 299 yuan, and 242 yuan, respectively. The figures of Jin Jiang Hotel were 66.4%, 251 yuan and 167 yuan respectively.
In fact, Jin Jiang Hotels has been emphasizing the transformation from "Greater Jin Jiang" to "Strong Jin Jiang", and Jin Jiang Hotels (China) has been combing its own brand in the past two years. (It should be noted that the listed company Jin Jiang Hotels is only the main operating entity of Jin Jiang's hotel sector, and is not completely equivalent to all of Jin Jiang's hotel businesses.) ）
According to the official website, Jin Jiang Hotels (China) currently has 38 hotel brands, more than Huazhu's 31. Judging from the quantity alone, there is still some room for streamlining its brands.
Jin Jiang Hotels mentioned in its financial report that in 2023, the company will comprehensively consider the brand scale, brand influence, development potential and differentiated competitive advantages, and identify 10 main development brands.
However, as for the specific 10 brands, Jin Jiang Hotels did not clearly indicate them.
In the view of Wine Management Finance, for hotel groups that have rapidly expanded their volume through multiple acquisitions, this kind of integration and choice is both tricky and imminent.
Since the reorganization of Metropolo, Vienna Hotel and Plateno Group into Jin Jiang Hotels (China) in 2020, Zhang Xiaoqiang, Chang Chuanghuang and Wang Wei have successively held the position of CEO.
Among them, Zhang Xiaoqiang is the chairman of Jin Jiang Hotel;
Chang Kai joined Vienna Hotels Group in 2003 and has served as Vice President and President of the Mid-range Hotel Division of Vienna Hotels Group, and President of Vienna Hotels Co., Ltd. Shanghai Headquarters. In 2016, Vienna Hotel Group was acquired by Jin Jiang International Group, and Chang Chuanghuang also joined Jin Jiang.
Wang Wei has been in the hotel industry since 2006 and has served as the Director of Operations of 7 Days Inn Headquarters, the former Director of Operations of Plateno's Mid-to-High-end Business Unit, and later as President of Hampton by Hilton China. In 2015, the former Plateno Group was acquired by Jin Jiang International Group, and Wang Wei joined Jin Jiang.
From the adjustment and change of the CEO candidate, it seems that we can vaguely get a glimpse of the challenges faced by Jin Jiang Hotels (China) in brand integration.
In the view of "Wine Management Finance", the brand combing of Jin Jiang Hotel should be more clear and bold. Resolutely abandon the "horse racing mechanism", concentrate superior resources to focus on supporting the main brands, grasp the big and let go of the small, and make it more clear that the main brands and the subdivided groups and scenarios behind them belong.
In addition, on January 24 this year, the relevant person in charge of the State-owned Assets Supervision and Administration Commission proposed for the first time at the press conference of the State Council Information Office that market value management will be included in the assessment of the person in charge of central enterprises. Prior to this, the SASAC focused on encouraging market value management.
In this context, it remains to be seen whether the scope of its assessment will be expanded to large state-owned enterprises in the future. However, for the main person in charge of Jin Jiang Hotel, it is reasonable to pay more attention to its own market value and stock price.
The article "Jin Jiang Hotel's Stock Price Falls Back to 4 Years Ago" pushed by "Wine Management Finance" on January 24 mentioned that the current stock price of Jin Jiang Hotel has almost fallen to the level of 4 years ago, shrinking nearly 6% from the peak of 68.06 yuan per share.
At present, the share price of Jin Jiang Hotels is hovering around 27 yuan, which is not much different from the closing price of 27.94 yuan per share on December 31, 2019.
Compared with Huazhu's market value of about 90 billion yuan, Jin Jiang Hotel, which has a market value of only 30 billion yuan, really needs to make efforts.
Co-ordinator丨Lao Dian Editor丨A Xin
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