Problems in the development process of China's hotel industry?

In the face of increasingly fierce international competition after accession to the WTO, in the face of the 16th National Congress after the withdrawal of state-owned assets from the hotel industry wave, in order to survive and develop, China's hotel industry to do in fact too much, too much. In the calm analysis and reflection, we believe that: resource integration is the development of China's hotel industry can not be delayed imperative.

One, what is the integration of resources

Let's look at a report:

Shanghai Jin Jiang Group and Prosperity Group announced on March 19 at the same time: located in the Shanghai Railway Station, East China Hotel to complete the management of the handover, which means that private enterprises, Shanghai, Prosperity Group, contributed 120 million yuan to acquire the East China Hotel announced the completion. Shanghai Jinjiang Group Chairman Yu Yongliang also said that the group will continue to sell the group's remaining 18 hotels in Shanghai, the equity, freeing up funds to seek to expand nationwide.

As China's largest hotel group, Shanghai Jin Jiang's move is striking and straightforward. In a nutshell, it's all about resource consolidation!

Resource integration is a term used frequently in economic theory and practice. What is resource integration? At the level of strategic thinking, resource integration is a systems theory way of thinking. At the level of tactical choice, resource integration is the decision to optimize allocation. In other words, resource integration, is the macro strategic thinking, is the optimal allocation of social resources, is in and out, have to take and give up, to obtain the overall optimal; is the micro market subject - the means of strategic adjustment of enterprises, is the daily work of business management. In China's hotel industry, more than 85% of star-rated hotels is still a single hotel, in the state of fragmentation, each fighting for their own and international hotel groups such as the coherent and into the land in China presents a "siege", invincible situation for those who are highly concerned about the development of China's hotel industry macro decision-making layer and are defending and developing the brand of China's national hotel industry. China's national hotel industry brand and "fighting" the hotel industry, what is more important than resource integration as a matter of urgency?

Second, the necessity and urgency of resource integration in China's hotel industry

(A) the current situation of resource allocation in China's hotel industry and the causes of

According to the National Tourism Administration released the "2002 China Tourism Statistical Yearbook" (see Table 1), according to the type of registration, in the country's 7,358 star-rated hotels, state-owned hotels 4,339, accounting for 59.0% of the total number of star-rated hotels; collective hotels, state-owned hotels, state-owned hotels, state-owned hotels, and collective hotels. Among the 7358 star-rated hotels in the country, there are 4339 state-owned hotels, accounting for 59.0% of the total number of star-rated hotels in the country; 790 hotels with collective economy, accounting for 10.7%; 268 foreign-invested hotels, accounting for 3.6%; and 324 Hong Kong, Macao and Taiwan-invested hotels, accounting for 4.4%. The above four types of hotels, **** accounted for 77.8% of all hotels. In addition, joint venture, joint-stock system, private and other types of registration hotels *** there are 1,637, accounting for 22.2% of the total number of star-rated hotels.

The state-owned economic components, although the main body of the market, are at a disadvantage in the competition, and we can see from Table 1 that the overall competitiveness of domestic tourism hotels is not strong. The occupancy rate is only 55.13%. According to statistics, in 2001, the state-owned hotels full labor productivity is only 57,800 / person, while the full labor productivity of the international hotel group is 131,200 / person, the latter is 2.26 times the former. 1998, the national hotel every year at least 300,000 rooms in the state of idleness, according to an average of 100,000 yuan of investment in each room, the country has 30 billion yuan of hotel assets Idle. Many hotels due to a serious shortage of customers, investment, financial burden is too heavy, so that investors and operators fell into the difficult situation of not enough to make ends meet, in a vicious circle of half-dead. Caused by the competitiveness of China's hotel industry is not strong reasons are manifold, the most fundamental reason is the hotel industry is not a reasonable allocation of resources.

From the structure of the main body of investment analysis, due to the economic system, China's state-owned hotels belonging to the party, government, military, police and commercial banks and other more than 400 different departments, the market competition is not high. There are a considerable number of hotels is the industry sector training, conference and leisure venues, in fact, not self-financing, and not fully into the market, or disconnected from the market, do not have to bear the market risk, but also do not have to worry about the future. These hotels have a complex asset relationship, not only with the nature of the enterprise, but also with the nature of the hospitality or hospitality base. The lack of separation of government and enterprises leads to local protectionism, industry authorities and regional administrative block division, a serious obstacle to the hotel as an asset for cross-region, cross-industry, cross-ownership structure of the market-oriented flow and operation.

From the industrial structure to analyze, China's state-owned hotel industry resource allocation: (1) excessive pursuit of high-grade, structural surplus is serious. China's high- and mid-range hotels are too concentrated, although measured by the C4 method of industrial concentration standards, China's hotel market industrial concentration is far below the monopoly standard. However, in the high-grade market, some well-known brands have occupied a certain market, resulting in a relative monopoly situation. Tourist hotel development is out of control, mainly because the number of high-grade hotel is too much, the growth rate is too fast, which in turn causes the negative chain reaction of the industry development. (2) regional structure is unreasonable, uneven spatial distribution structure. China's hotel industry is relatively concentrated in the eastern region, the distribution of the central and western regions is less, high-grade hotels in the eastern cities such as Beijing, Shanghai and other places with a high degree of concentration. These directly lead to fierce competition within the industry and the region. The irrational allocation of resources in the hotel industry has largely led to its low economic efficiency.

Table 1 China's star-rated hotel scale and business situation in 2001

Number of hotels (home) Number of guest rooms (10,000) Number of beds (10,000) Operating income (100 million yuan) Room occupancy rate (%)

Total 7358 81.63 153.31 763.32 58.45

By type of economy

State-owned economy 4339 42.83 84.93 316.98 55.13

Collective economy 790 6.38 11.77 42.19 59.25

Joint-stock cooperative enterprises 115 4.24 5.81 15.96 60.71

Unionized enterprises 97 1.02 1.93 10.85 57.44

Limited Liability Companies 477 5 9.19 48.81 62.38

Joint-Stock Companies 276 3.84 6.98 46.14 64.73

Private Enterprises 351 2.77 5.37 12.83 56.52

Other Domestic Enterprises 321 2.95 5.54 20.68 59.42

Hong Kong, Macao and Taiwan Investment Enterprises 324 6.78 11.7 135.91 64.65

Foreign-Invested Enterprises 268 5.82 10.07 112.96 64.15

By Hotel Star Rating

Five-Star 129 5.03 7.77 149.66 65.12

Four-Star 441 10.61 19.13 180.61 64.96

Three-star 2287 32.74 60.56 282.96 60.34

Two-star 3748 29.47 58.17 140.12 53.35

One-star 753 3.77 7.68 9.97 46.33

( Excerpted from China Tourism Statistical Yearbook 2002, China Tourism Publishing House)

(2) The severe international competitive situation faced by China's hotel industry

International hotel groups with strong capital strength and mature management experience have entered China for more than 20 years, and although they have not reached the comprehensive coverage of the market pattern, it is undeniable that they have become the dominant players in the highly sophisticated market of China's hotel industry. The hotel industry has become the leading high-tech market. And more international hotel groups are adopting diversified property rights transactions to speed up the pace of entering the Chinese market, and they are actively expanding rapidly to emerging market areas and grabbing the resources of middle and low-end market segments. Let's take a look at the aggressive competition from international hotel groups:

The world's largest privately held hotel management company, Hyatt Corporation, will build the Park Hyatt, the world's highest-ranking ultra-five-star hotel, in Beijing. The group is still discussing the exact location of the Park Hyatt in Shanghai.

Following the opening of the Grand Hyatt Oriental in Beijing and the Grand Hyatt Shanghai in the Jinmao Tower, China's tallest building, another of the group's five-star branded hotels will be built or considered for construction in cities such as Ningbo, Hangzhou, Chongqing, Sanya, Guangzhou, Shenzhen, Xiamen, Shenyang and Dalian. -Hyatt Regency. In this way, Hyatt's three brands of hotels: Hyatt, Grand Hyatt and Park Hyatt will all be located in China.

From 2002 to the present, the international hotel giants circling the Chinese mainland has occurred a number of events, involving more than four-star hotels are: January 2002, Canada's Four Seasons Group purchased a 21% stake in the Four Seasons Hotel project in Shanghai; February 2002, Hong Kong's New World Group invested more than 100 million U.S. dollars to build and renovate the four-star New Warmer Hotel opened in August 2002, by the Binjiang Group investment, the U.S. Marriott Hotel, a five-star brand, the hotel will be located in the Chinese mainland. Riverside Group and hosted by the U.S. Marriott Hotel Management Group, the second five-star hotel in Tianjin - Renaissance Riverside Hotel officially opened; in September 2002, the 33rd hotel managed by Marriott International in China, Beijing Marriott Hotel Golden Mile, opened; on September 24, 2002, the Kyushu Hotel invested in the renovation of the Intercontinental Hotel and the acquisition of new hotels; in 2003, the New World Group invested more than US$100 million in the construction and renovation of the New Warmer Hotel in Hong Kong. Hotel and acquiring new hotels; in January 2003, the construction of the super five-star hotel, Shanghai Zhongguo Hotel, which is a joint venture between Sommeria Hotel Management Group and New Day International, and which is expected to open in 2004; and Shangri-La Hotels and Resorts, which is opening hotels in Zhengzhou, Zhongshan, Wenzhou and Sanya, and The Peninsula Hong Kong, which is in the process of Shanghai Puxi to choose a joint venture party; October 8, 2002, the world's third-largest hotel service apartment company, Singapore Ascott Group, the next three years will be in Beijing, Shanghai and Tianjin market share from the current 10% to 25%, and in Dalian, Qingdao and other coastal cities to open new hotels.

The three-star hotels involved are: in early 2003, Accor and Shou Travel Group announced that they would open 20 franchised hotels in three years, launching the three-star "Mercure" hotel; in April 2002, Accor acquired the international hotel chains Century and Zenith; in addition, Accor announced that it would open three hotels in Tianjin, Chengdu and Chongqing. In addition, Accor also announced that it would independently operate its budget hotel chain "IBS" in Tianjin, Chengdu and Chongqing, with traveling salespeople as its target customers. ②

...... ......

China's hotel industry is in the international competition, domestic competition, international competition in the pattern of multi-cornered competition, competition is related to their own survival, the relationship between the national industrial security. China's hotel industry has no time to rely on their own accumulation of step-by-step to cultivate and develop, macro and micro level of resource integration has been the most urgent, without delay.

Three, China's hotel industry resource integration ways and means

(a) macro-level resource integration

With the deepening of China's state-owned assets management system reform, the strategic adjustment of the state-owned economy of the idea is increasingly clear. After the 16th Party Congress, state-owned assets have accelerated the pace of withdrawal from the general competitive field, the integration of state-owned resources for the hotel industry has brought unprecedented development opportunities and challenges. Hotel industry belongs to the general competitive industry, state-owned hotel contributors are industry management, government at all levels and state-owned investment institutions, the end is still the government. Hotel industry resources integration in the exit object, it becomes the central government to local governments (such as provinces, cities, counties, local government investment in hotels, etc.), the hotel industry in charge of the central government authorities to other industry sectors (such as the banking system run by the hotel, railroad system, aviation system, military system run by the hotel, etc.) of the relationship. Resource integration of the hotel industry should be conducive to the development of the hotel industry, the hotel industry to actively participate in market competition. The role of the government sector contributors is the first issue that must be resolved. Must be clear by a unified authority and institutions at all levels of departments and industries of state-owned hotel assets for systematic and standardized, smooth and orderly strategic adjustment.

In the hotel industry market development is relatively imperfect, the administrative industry monopoly power is very strong, the faster way is to state-owned hotels for the implementation of the object of the contributor, in the solution of the government sector on the basis of the willingness of the contributor to promote the integration of state-owned hotels and clustering of resources, that is, in the administrative industry, monopoly power is relatively strong between the state-owned hotels in the combination of the group to serve as an investor in the Government Industry sectors as the leading, through the government's power to carry out the combination. After the establishment of the group, the government gradually retreat to a secondary position, leaving the market to regulate. Specifically, you can use the management authority of the macro-strong sector, to the region, the industry investors as the basis for contact, in accordance with certain criteria, in possession of more hotels in the region and the industry (such as more than 20 hotels), the formation of regional and industry hotel group, by the region, the industry sector or the competent department, in the form of administrative transfers to the industry sector investment in the property rights of the various hotels, assigned to the region, the industry Hotel group (or hotel management company) unified management, to achieve internal integration of resources. After the establishment of the hotel group, according to the market mechanism, to further strengthen the market-oriented management, the government gradually fade out. After the withdrawal of the government, and then by the market competition to carry out a new round of integration.

(B) micro-level resource integration

With the advent of China's state-owned assets from the hotel industry to withdraw from the wave of China's hotel industry must grasp the opportunity of this historic change, from the height of the strategy and industry development, the integration of internal and external resources, to create a new situation in the development of China's hotel industry.

China's hotel industry must first integrate its own economic resources to improve the efficiency of the use of economic resources. This resource consists of tangible physical resources and intangible resources. Tangible resources include land, fixed, liquid assets, etc.; intangible resources include brand resources, cultural resources, human resources, service resources, management resources, information resources, customer resources, marketing resources, government resources, etc.. China's hotel industry should vigorously improve the modern enterprise system, absorb all kinds of economic subjects in the society, improve the single capital structure, make full use of China's securities market, state-owned assets management companies and other property rights trading market and intermediary to realize the diversification of investment subjects, to achieve the flow of assets in the hotel industry stock and value-added. China's hotel industry to improve and integrate the property rights of intangible resources, intangible resources to achieve tangible and property rights, through the integration of resources to enhance the brand, service and management, to enhance their core competitiveness.

The hotel industry is a labor-intensive industry, the hotel industry product is the service has a non-storage and non-transferable and product (service) production and sales at the same time the characteristics of the single hotel there is a scale of diseconomies. To have the number of rooms to examine the world's major hotel groups, we will find that the average number of rooms owned by the hotel group within the single hotel are not large, to 400 rooms below the scale of the main. The economies of scale in the hotel industry are mainly realized through the intensive operation of hotel groups, and the operating expenses and management costs of enterprises can be reduced through intra-group sharing. These expenses and costs include human resource fees, marketing costs, procurement costs, unit service costs, etc. Therefore, on the basis of integrating internal advantageous resources and enhancing the efficiency of internal resources, promoting the implementation of external resource integration strategy and realizing the group development of the hotel industry is the inevitable direction of the development of China's hotel industry. For hotel brands with a certain strength, it is imperative to actively introduce strategic investors with capital strength to promote the organic integration of capital and brand, capital and management. Accompanied by state-owned assets from the hotel industry wide range of exit, a large number of former state-owned single hotel will be pushed to the property rights trading market, a huge buyer's market of hotel industry assets has been presented, the hotel industry resources integration of the era has come, only those who have the strength of the capital and the brand of the hotel industry group can really seize the opportunity to choose their own target markets and objects, and actively develop external resources. Integration of strategic investment, the use of mergers, acquisitions, leasing, trusteeship, packaging and sale of a variety of means of resource integration, to achieve a single hotel and scattered hotel group of holding, equity and strategic cooperation, in the realization of cross-regional, cross-industry strategic layout at the same time, to achieve the extraordinary development of the hotel industry group.

Source:

①Wang Ying: "Jinjiang Group Shrinks Shencheng Front," Wen Wei Po, March 20, 2003

②Ming Jun: "International Hotel Giants Running for Cover in China," International Finance Daily, February 23, 2003

References:

Peking University China Hotel Industry Development Project Research Group: "Strategic Thinking on the Development of China's Hotel Industry and its Coordinated Management", China Tourism Hotel Association Network, May 2003

Reference Source URL: Palace Kitchen www.gongchu.com

Pan Xiaopeng and Zhang Li: "Competitive Patterns and Countermeasures in China's Tourism Hotel Industry", Tourism Research, Issue 2, 2003