Development of Economy Hotel in China

The concept of economy hotel came into being in the United States in 1980s, and only appeared in China in recent years. One of the characteristics of budget hotels is the simplification of functions. It concentrates its service functions on accommodation, strives for perfection in this core service, and at the same time greatly compresses, simplifies or even cancels functions such as catering, shopping and entertainment, thus greatly reducing operating costs.

Economy hotel is a hotel format relative to the traditional full-service hotel. From the end of 1930s to the end of 1950s, budget hotels were in the bud and early stage of development. The main feature of this stage is the emergence and development of motels. For example, as early as 1939, several motels in Florida, USA spontaneously formed an industry joint organization-Quality Courts, which was renamed Quality Courts United the following year to provide industry services for single motel owners. The initial development of budget hotels in China began at 1996, and Jinjiang Inn, a subsidiary of Shanghai Jinjiang Group, came out as the first budget hotel brand in China. 2 1 century, various budget hotel brands have mushroomed and developed rapidly. In addition to the largest and oldest Jinjiang Inn, Home Inns, which was jointly invested by Ctrip.com and BTG Hotel Group in 2002, also developed rapidly, and was listed on NASDAQ in 2006, becoming the first overseas listed hotel in China. In addition, the 7-day hotel chain and Hanting Hotel established in 2005 were listed overseas in 2009 and 20 1 1 respectively.

Chart: The overall market situation of domestic budget hotels (representative hotels, customers, prices, occupancy rate). The main brands, customers, prices and occupancy rates of domestic budget hotels are representative hotels such as Home Inn, Jinjiang Star, Shangkeyou, Hanting, 7-day chain and ordinary white-collar tourists. The price is between 150-320 yuan. The occupancy rate of brand economy hotels is above 90%. Source: Information Research Department of Li Qin 20 10.06 Although the impact of the financial crisis has not completely subsided and the risk of a double dip in the global economy still exists, in 2009, driven by the rapid economic development in China, the continuous growth of the tourism market, the accelerated improvement of transportation, conferences, exhibitions and urban infrastructure construction in various places, the World Expo, the Asian Games and many other favorable factors, the supply of budget hotels in China continued to maintain a rapid growth trend. By the end of 2009, there were 303 modern economy hotel chain brands in China accommodation market, and the number of hotels opened exceeded 3,757, up 33.94% year-on-year. The total number of rooms opened was 412,840, up 3 1.93% year-on-year. At the end of 20 10 at the beginning of 2009, with the improvement of domestic economy, the occupancy rate of budget hotels in some areas even rose to over 85%. From 200 1 up to now, the average annual growth rate of the overall scale of budget hotels in China has far exceeded 50%, which is rare in the development history of budget hotels in the world. In April of 20 10, the Ministry of Commerce issued the Guiding Opinions on Accelerating the Development of Accommodation Industry, proposing to focus on brand, chain and convenient operation, and strive to increase the proportion of budget hotels in China from less than 10% to about 20% in two to three years. In addition, after entering the Expo period, the occupancy rate of budget hotels in Shanghai has reached over 90%, the price and occupancy rate have risen simultaneously, and the price of ordinary standard rooms has generally increased by 20%- 150%. These driving forces or demonstration effects will inevitably lead to a new upsurge in investment and transformation of budget hotels.

However, the market is not endless. Not all hot money tides are opportunities, and risks are inherent. Leaving aside the World Expo and the Asian Games, it is an indisputable fact that since 2007, the occupancy rate of budget hotels in many cities has been declining year by year, and the market competition has become increasingly fierce. At present, four of the top five domestic giants, such as Home Inns, 7 Days, Hanting and Jinjiang Inn, have been listed on NASDAQ, NYSE and HKEx respectively, leaving a relatively small room for latecomers to attract gold. In 20 13, 7-day hotel chains withdrew from the market and moved to the middle and high-end hotel market, but Zheng Nanyan said frankly that 7-day hotel chains will still be the main source of profits in the next five years. After fierce competition, China budget hotels will still maintain a strong development momentum.