Chains to increase market share
Industry observers see trend in hotels in China evolving toward pattern set internationally
More family inns and independent hotels will join chain brands in the Chinese market in the future, to improve their operational efficiency and attract more customers, according to industry analysts and observers.
China has about 15 million guest rooms, about 77 percent of which have no brand. In the United States, the proportion is about 30 percent, Qin Yu, professor at the School of Tourism Science at the Beijing International Studies University, told a forum on Thursday.
Hotel chain brands have more strength in infrastructural construction, personnel training, client management, membership management and market influence. That’s why such a model continues to evolve well in developed countries, he said.
“The maximum capacity of the Chinese market would be 20 million guest rooms, which means the space for newly established hotels is limited,” he said.
“The future opportunity lies in the inventory of existing hotels, especially in non-first-tier cities.”
According to Qin, it is estimated that about 50 to 60 percent of guest rooms in China — compared with 23 percent as of now — will join chain brands in the next 10 to 15 years.
Qin shared his insights at the 2018 China Daily My Choice Hotel Award held in Beijing, an annual event for the public to select their favorite hotels based on such considerations as hotel management, accommodation, conference services, artistic design and social responsibility.
Zhang Baolong, vice-president of Lvyue Group, a strategic investment company, which is a subsidiary of Ctrip, China’s biggest online travel agency, told the event that customers expect better beds, bathroom amenities and tailored services.
The established trust and fame of a hotel chain brand can help tourists choose their travel accommodation more easily as they can match the brand with a promise of experience in terms of quality and feelings, he said.
The company operates three brands — Floral, Sucha and Vyluk — for family inns and independent hotels in travel destinations or urban areas.
The Floral brand, for example, covers about 600 of 4A and 5A travel attractions and scenic spots nationwide. The company helps to renovate infrastructure and provides consultancy services for individual operators.
“The hotel chain brand can reduce costs for them both in operation and marketing,” he said. “For example, we are likely to be given a deep discount when purchasing materials.”
Zhang added that a mattress may cost an independent hotel 10,000 yuan ($1,470) to buy, while the price could be reduced to 1,000 yuan for chain brands.
According to Tao Xuexuan, senior product director of Meituan Hotels, a subsidiary of Meituan, China’s major life service e-commerce platform, about 70 percent of hotel customers using the online portal are younger than 30 years old, and demand from post-1990s and post2000s customers is growing rapidly.
She said younger people have a stronger demand for product quality, personalized experiences, unique designs and one-stop services in accommodation, catering, entertainment, shopping and sightseeing.
“The key criterion for consumers to choose a branded hotel is whether it can offer services that meet their expectations,” she added.