For Jiang Yu, a mental worker, insomnia until two or three o'clock in the morning is the norm after working at high saturation during the day.
After staying in the hotel for a week on a business trip, she bought the hotel pillows and mattresses home.
The pillow bought by Jiang Yu is the memory pillow operated by Atour Hotel. Judging from the business data, selling pillows has become one of Atour's main businesses.
According to the financial report, in 2023, Atour's retail business revenue will increase to 972 million yuan, and the proportion of Atour's total revenue will rise to 20.81%, exceeding the proportion of Atour's self-operated hotels.
The memory pillow "Deep Sleep Pillow Pro" is a popular item in Atour retail. According to public data, the cumulative sales of "Deep Sleep Pillow PRO" will exceed 1.2 million in 2023. If the retail price of the product is estimated at 309 yuan, Atour's revenue from selling pillows alone will exceed 365 million yuan.
Some Atour front desk staff said that some guests "ordered 12 pillows in one go" when they left the hotel.
It's better to open a hotel than to sell pillows, and Atour, who is "not doing business", is bound to become the "first share of pillows"?
Raise the power of the whole hotel and sell pillows
In order to sell pillows, Atour can be said to be the power of the whole hotel.
The most conspicuous thing in the lobby of other hotels is the art installation, and the lobby of Atour Hotel is a pillow occupying the C position.
In the most conspicuous position in the lobby of Atour Hotel, there are pillows of Atour's own brand / Source: Photo by Salt Financial Reporter
The salt financial reporter noticed that in an Atour Hotel in Beijing, pillows of different specifications are placed in the core area of the lobby for display, and customers who need to take the elevator will pass through this area.
The "foreshadowing" of pillow sales starts with check-in.
As long as you are a member of Atour, the front desk will take out a "deep sleep pillow PRO" for customers to experience during their stay.
When checking in at Atour, the front desk will take out a "deep sleep pillow PRO" for customers to experience/Source: Photo by Salt Financial Reporter
Except for Atour, there is no hotel where the pillows have such a strong sense of presence, and the front desk needs to be solemnly recommended to customers.
In Atour, from the front desk to cleaning, it seems that every clerk can be turned into a pillow at any time. Occasionally, when I encounter room cleaning and ask about the functional differences of different pillows, the other party can also talk eloquently, introduce the pillows of different specifications in detail, and even mention that Atour's pillows will change the degree of softness and hardness according to the temperature, which will be harder in winter and softer in summer.
The service experience of free sleep pillow products accurately sniped everyone's "taking advantage" psychology. Many members will take the "Deep Sleep Pillow PRO" with them when they leave the store after receiving the free trial of the "Deep Sleep Pillow PRO".
However, Atour's main "deep sleep pillow Pro" is not cheap, and the salt financial reporter found through the comparison of Atour APP, Tmall flagship store and Jingdong's self-operated flagship store that even if the discount is counted, the average price of this product is above 300 yuan.
On the Atour app, the most expensive pillow is the "Sleeping Composite Down Pillow", with a price starting at 599 yuan.
On the Atour app, the most expensive pillow is the "Sleeping Composite Down Pillow", with a price starting at 599 yuan
This is better than Fuanna (002327. SZ), Luolai Life (002293. SZ) and other home textile giants are more than twice as expensive. Some brands of pillows on the market can be bought for 70 yuan.
Li Hang, a lover of Atour Hotel, once did not buy Atour pillows because of the slightly high price. The nature of Li Hang's work requires frequent business trips, and pillows have become an important reason why he chose to stay at Atour Hotel.
Once, he looked at the pillows on display in the lobby of the Atour Hotel in Zhongshan City, and the clerk enthusiastically stepped forward to introduce him to related products.
A pair of pillows cost six or seven hundred yuan, which was really not cheap for Li Hang, who had just entered the workplace at that time. He added the pillow to the shopping cart, and Li Hang bought it after more than half a year when there was a promotion.
Li Hang compared the "Deep Sleep Pillow Pro" with the ordinary pillow that comes with the room of Atour Hotel, "It seems to be more supportive, I can't describe it, but it is quite comfortable."
In 2023, the GMV of the Atour pillow brand on the third-party e-commerce platform will exceed 250 million yuan, which is 6 times the turnover of the "Double 11" in 2022. Its star product "Deep Sleep Pillow PRO" is claimed to have "won the first place in the sales volume of pillows on various e-commerce platforms" on platforms such as Jingdong and Tmall.
Hotels are also retail scenes
Atour, who opened a hotel, why did he suddenly start a pillow business?
Hotel accommodation is divided into off-season and peak season, but household products can be sold at any time and at will. Salt financial reporters combed and found that the gross profit margin of the hotel industry is less than 20%, and the gross profit margin of the home retail industry can reach 40%-60%.
Retail is a good business, and Atour founder Wang Haijun discovered this. In an interview with the media, he said that the hotel is not only a scene of accommodation, but also a scene of sleep.
In other words, in the hotel scene, pillows, mattresses, towels, bath towels, hand sanitizer and other products that can be stuffed into the scene are potential business opportunities.
Atour currently has three original lifestyle brands, a dormant scene brand, a scent aesthetics brand, and a comprehensive in-transit travel brand/Source: Atour official website
Atour calls its retail business "scene retail", and has created three consumer brands - the dormant scene brand "Atour Planet", the scent aesthetics brand "Sahe", and the all-round in-transit travel brand "Z2GO&CO.".
The three brands are all related to hotels, Atour Planet's main products are pillows, four-piece sets and mattresses, Sahe focuses on shower gel, shampoo and fragrance, and Z2GO&CO. deals in water bottles, trolley cases and other products.
In this sense, Atour not only does hotels, but also does new consumption. According to the 2023 financial report, Atour currently has 63 million members, all of whom are potential targets of Atour Retail, and those consumers who have not lived in Atour but purchased its peripheral products have fed and cultivated the future guests of Atour Hotel.
According to the prospectus of Atour, in 2022, the repurchase rate of Atour members will be 52.8%.
However, in addition to the hot sales of pillows, Atour is not without hidden worries.
The market for retail is more intense. As far as pillows are concerned, the opponents that Atour needs to face are not only the old home textile brands, but also the supermarkets that will do their own brands, as well as Internet giants such as NetEase Yanxuan and Beijing Tokyo Manufacturing.
The technical barriers to pillows are not high, not to mention that Atour does not have its own factory, but chooses Mengbai to cooperate as a foundry for production.
Products without technical barriers, after the success of a brand, the market flocks to imitators, so that Atour has to be vigilant.
In addition to pillows, Atour has not found a second popular item for a long time. In the case of more competitors and slower market growth, Atour who only relies on pillows to squeeze into the retail market may still need to maintain a sense of crisis.
Light assets, heavy liabilities
Return to Atour's main business, hotels.
Under the wave of cost reduction and efficiency increase in the global tourism industry, the competition in the hotel industry has intensified. Compared with the three major hotel brands of Huazhu, Jin Jiang and BTG, Atour is far from its competitors in terms of revenue and scale.
According to the financial report, in 2023, Atour Group will achieve revenue of 4.666 billion yuan and net profit of 739 million yuan. Both revenue and net profit are less than a quarter of Huazhu's.
Comparison of the performance of the four hotel groups in 2023
In the hotel industry, the focus of enterprise competition is not only the quality of products and services, but also the advantage of scale.
According to the top 10 hotel brands in terms of market share in 2023 released by the China Hotel Association, Atour ranks seventh in terms of market share, with only 1.84%. The top five hotel brands in terms of market share are Jin Jiang, Huazhu, BTG, Green and Dongcheng, which together account for more than 60% of the market share.
The market is increasingly concentrated on the top hotel brands. At the same time, many leading hotel brands are still staking their ground and opening stores against the trend.
Atour is also one of them. In 2023, the number of new Atour stores will be close to 300. By the end of 2023, Atour has opened more than 1,200 hotels, and there are 617 hotels under construction or under development.
In the earnings call, Atour management said that it plans to expand to 2,000 stores by the end of 2025, directly doubling the current number of stores.
However, compared with its competitors, Atour still has a certain gap.
In 2023, Huazhu Group will open 1,641 new stores in China, 3,061 hotels to be opened, and 9,263 hotels in China. Jin Jiang Hotels added 828 net additions in China, bringing the total number of hotels in operation to 12,448.
Relevant data show that among the more than 1,200 stores in Atour, directly operated stores account for about 3%, and franchised stores account for 97%.
The expansion of the number of franchised stores means that Atour also needs to invest more funds to support the operation of these stores, including but not limited to advertising, marketing operations, brand promotion and other aspects.
This is also reflected in the financial report. In 2023, Atour's total operating costs and expenses will reach 3.8 billion yuan, accounting for more than 80% of total revenue, higher than the industry average.
Although the number of franchise stores accounts for a large proportion and it is more "asset-light" for Atour, the high debt ratio of Atour Hotel has become a point that has been questioned in the capital market.
In 2023, Atour's debt ratio is 68.72%, although it is 6.35% lower than the previous year. However, in terms of the amount of liabilities, Atour's total liabilities have risen from 1.681 billion yuan in 2021 to 4.527 billion yuan in 2023.
In this regard, Zhao Huanyan, a senior economist in the tourism and hotel industry, believes that Atour Hotel is a self-made company listed in the epidemic, which is different from the enterprises that have been on track before the epidemic, and "high debt ratio and high operating costs are also understandable".
He told Yan Finance that the average RevPAR per room of Atour Hotel is nearly 400 yuan, which has exceeded the average of five-star hotels.
The average room price of Atour Hotel in different cities is around 400 yuan/Source: Screenshot from Ctrip
Another hotel industry analyst, who did not want to be named, told Yan Finance that in the case of stable cash flow and strong solvency, the impact of appropriate debt on the company is relatively limited. He believes that in the environment of weak demand, Atour will achieve an OCC (occupancy rate) of 77.8% and an ADR (average room rate) of 464 yuan in 2023, which is already a very good level in the hotel industry.
Compared with the first echelon of domestic hotel groups, in terms of net profit in 2023, Atour with a net profit of 739 million yuan is almost equal to BTG Homeinns with a net profit of 795 million yuan.
Overall, with its mid-to-high-end boutique positioning and retail business, Atour is a fast-growing hotel brand. Zhu Xinjiang, a well-known hotel investor and founder of Zhonghui Jingyu Hotel Group, believes that BTG Homeinns is currently falling behind in the first echelon of domestic hotel groups, and "Atour is expected to squeeze into the first echelon in the future."