Filled with many homogeneous products, service and competition, China hotel market is currently in the “red sea”. Can we find new possibilities for the development of hotel industry in the future? In the session of “Captains, Set Sail!”, we invited four captains from different industries, Zongbing Chen (Chairman & President of Legend Cultural Development Co., Ltd), Peng Huang (Executive Deputy General Manager of HK CTS Hotels Co., Ltd.), Michael Zhang (Chairman of RET Holding Group Co., Ltd.) and Jason Zong (President & COO of Home Inns Hotel Group) to discuss how to find the new way for the China hotel market.
New Business Model – “Using 1/3 of construction cost to build a hotel in one year!”
The key to the hotel development in a tourist destination is the transformation of the business model. Firstly, strong experience: the hotel should be located in the core area of the destination. Secondly, low construction cost: which should be controlled within the amount similar to 1/3 of the construction cost for a traditional hotel. Thirdly, short construction time: the hotel should be built within one year.
Go out – “ More than100 million outbound Chinese tourists every year!”
As a state-owned enterprise and following the national strategy “One Belt, One Road”, CTS has invested overseas and recently completed an acquisition in the UK. China is already the No.1 source country for international travel and there are more than 100 million outbound Chinese tourists every year. Instead of fighting hard in the domestic “red sea”, why not go out to see if there is a blue ocean beyond the domestic market?
Break the Boundary of Hotels – “ Hotel should be the entrance of high-end customers.”
Impacted by the Internet, the function of offline commercial developments, including hotel and retail, should return to a place for social gatherings or family celebration. Currently, most hotel operations are rather passive. But in fact hotels could provide more elements to connect the in-house guest with the surrounding community, either before or after his/her arrival. The traditional value-added service, the connection with the community and the integration with other business providers are very important.
Come Back – “ Adjust the Brand Structure”
Home Inns Hotel Group is listed in the United States. After going abroad, it received a privatization offer to return to China in June this year. This acquisition is currently under way. Home Inns is considering how to adjust its brand essence, including the brand strategy, brand structure, brand operation and brand marketing. As one of the key players in the domestic budget hotel sector, Home Inns Hotel Group’s future development will be focused on mid-tier and upper mid-tier hotels. Although currently the major operation model is lease and franchise, Home Inns will also consider management model in the future.
Horwath HTL has created a new brand identity – CHAT, tailored for China’s hotel and tourism industry! CHAT, the abbreviation for China Hotels And Tourism, encourages industry people to gather, create dialogue and network through the platform, as well as exchange and share experience and knowledge. CHAT Beijing is an enhancement of the “China Hotel Development and Financing Conference”, which has been held for eleven years in Beijing. We further focus the conference specifically on hotel and tourism development and investment issues. There are 650 delegates attended 2015 CHAT Beijing with the largest segment being domestic hotel and tourism developers and owners. CHAT Shanghai is an upgrade of our annual “China Hotel Market Review and Outlook Seminar”, which has been held over the past six years. CHAT Shanghai focus on hotel asset management and operations. 510 delegates attended CHAT Shanghai in September 2015. CHAT Beijing and CHAT Shanghai held in Spring and Autumn respectively cover the full hotel and tourism business cycle from development and investment to asset management and operations. CHAT will enable you to achieve successful business development through its various powerful platforms!
About Horwath HTL
Horwath HTL is the management consulting of Crowe Horwath International that specializes in hotel, leisure and tourism industries. Established in Asia in 1987, Horwath HTL has consulted about 4,000 hotel and tourism related projects throughout the region (including over 1,200 projects in China) for clients ranging from individually held businesses to the world’s most prominent operators, developers, lenders, investors and industrial corporations. Horwath HTL now operates offices in several key cities throughout the Asia Pacific region, including Auckland, Beijing, Hong Kong, Jakarta, Kuala Lumpur, Mumbai, Shanghai, Singapore, Sydney and Tokyo. Our offices work closely together to ensure that our clients receive a multi-skilled international perspective for their projects. Horwath HTL is also supported by the Horwath database, the largest and most complete hotel and tourism related database in the world. No other firm is better positioned to meet today’s and tomorrow’s industry challenges than Horwath HTL – Experts in the hotel, tourism and leisure industries.