Development Trends of China’s Hotel Industry

Looking back on the past 20 years, the development of China's hotel industry has gone through the confusion in the early 1980s, to the sudden start in the 1990s, and then returned to the current vitality. After 23 years of ups and downs, its vitality has become increasingly strong. China's hotel industry was one of the first industries to open to foreign investment. As early as 1982, the first joint venture hotel "Beijing Jianguo Hotel" appeared. In the following two decades, China's hotel industry has followed the international hotel industry. The development and penetration have achieved good development trends.

1. Basic trends in the development of the hotel industry

1. Accelerating expansion in quantity and scale

Since 1980, the industrial scale of China’s hotel industry has increased exponentially. Accelerate development. The supply of hotels is growing rapidly with the expansion of demand. Taking foreign-related tourism hotels as an example, there were 203 hotels in 1980. In 2002, the number of star-rated hotels increased to 8,880, an increase of nearly 44 times. During the same period, the number of guest rooms increased by more than 30 times. The growth rate of tourist hotels is more than 50% every five years.

2. The grade and scale structure has been formed

If all types of hotels are put together without a systematic approach, by the end of 2002 (1) there will be 175 five-star hotels,** * has 64,900 rooms, accounting for 7.23% of the total number of star hotel rooms in China; (2) 635 four-star hotels, *** has 143,500 rooms, accounting for 15.99% of the total number of star hotel rooms in China; (3) three-star hotels There are 2,846 star-rated hotels, with 346,500 guest rooms, accounting for 38.62% of the total number of star-rated hotel rooms in China; (4) 4,414 two-star hotels, with 306,000 guest rooms, accounting for 38.62% of the total number of star-rated hotel rooms in China. 34.10 of the total; (5) There are 810 one-star hotels with 36,400 rooms, accounting for 4.06 of the total number of star hotel rooms in China. It shows a pattern of small at both ends and large in the middle.

3. Spatial distribution appears in a three-tiered state.

The development level of China's hotel industry presents a three-tiered state in space: the first ladder is located in the eastern coastal areas, and the second ladder is in China. In the central zone, the third step is the western zone, and the overall situation is that there is more in the east and less in the west. In order of the number of star-rated hotels, the top ten regions in the country are: (1) Guangdong 926; (2) Zhejiang 723; (3) Jiangsu 575: (4) Beijing 572; (5) 560 in Yunnan; (6) 473 in Hubei; (7) 401 in Shandong; (8) 347 in Liaoning; (9) 319 in Shanghai: (10) 319 in Hunan.

2. Transformation of the entire industry

1. From the mandatory government foreign affairs reception system to a competitive industry in the national economy

Travel hotels in the past Most of them are foreign affairs reception institutions, and most of the guest houses are official accommodation institutions. There is no hotel industry and development scale. After more than 20 years of construction, a traditional, command-oriented service organization affiliated with the government's foreign affairs reception work has been transformed into an increasingly eye-catching and competitive industry in the entire national economy. In 2000, tourism revenue was 450 billion yuan, and the hotel industry accounted for nearly half of the tourism revenue. The characteristics of the industry have become increasingly obvious.

2. From a closed industry to an open industry that is in line with international standards and has a high degree of marketization.

The hotel industry was the first to open to foreign investors, allowing foreign investment and joint ventures with foreign investors. So far, China's tourism and hotel industry has utilized more than 20 billion U.S. dollars of foreign investment, and there are more than 800 foreign-funded hotels. Since Peninsula Group managed Beijing Jianguo Hotel in 1982, a number of international hotel groups have entered China one after another. The introduction of star rating standards and the implementation of international practices in industry management and hotel management have greatly improved the international development level of the hotel industry. After 20 years of development, the hotel industry has transformed from a closed industry in the planned economy to an open industry with a high degree of marketization that is in line with international standards earlier, faster and more smoothly.

3. The relationship between supply and demand has shifted from a seller-dominated market to a seller-dominated market

The active economy and the development of tourism have enabled more hotel companies to participate in the Chinese hotel market. It intensifies competition among hotel companies and promotes changes in supply and demand. The management of Chinese hotels pays more attention to the needs of consumers. In hotel management, through the demonstration role of star-rated hotels, the shift from demand adapting to supply to supply adapting to demand has been transformed. The hotel industry is changing from a seller's market where supply exceeds demand to a buyer's market. Due to rapid development, quite a few regions have experienced oversupply in recent years, and competition among enterprises has become more intense. Hotel operators pay more attention to market trends and changes in customer needs. This concept and behavior promotes hotel companies to further improve their competitiveness.

4. The cost center business operation model of the planned economy has shifted to the profit center business operation model of the market economy

Before 1980, most hotels in China were business guesthouses, and hotel services Single, providing only two services: food and accommodation. There is a lack of indicators for operating efficiency, a lack of standards for services, and no cost accounting. Financially, a system of unified revenue and expenditure, surplus retention, and balance subsidies is implemented, and there is no task of turning over profits and taxes. After the reform and opening up, foreign investment entered, and Chinese hotel management agencies implemented a A series of policy measures have prompted hotels to transform their operating mechanisms, allowing Chinese hotels to transform their short-term decision-making, management systems, organizational structures, salary distribution, employee recruitment and rewards, and financial cost management, and begin to implement independent operations, independent accounting, and self-responsibility. Profit and loss enterprise management system. The awareness and behavior of hotel companies in profit-oriented market competition have caused fundamental changes in the entire hotel industry.

5. From traditional experience management to modern scientific management

Based on the implementation of the management experience of Jianguo Hotel, the introduction of advanced foreign scientific management methods and the national conditions are initially combined. A Chinese-style hotel scientific management system is summarized, which enables hotel companies to transform from empirical administrative management to scientific management, and promotes the accelerated transformation of China's hotel industry management models and operating mechanisms in the direction of modernization.

6. Industry management has evolved from simple and disorderly to basically scientific, systematic and orderly.

Through the implementation of the hotel star system, China's hotel management will be in line with international standards. Reform government agencies, transform functions, reduce intervention, and shift the development of China's hotel industry to the basis of market regulation. Industry authorities establish industry rules to promote orderly competition among hotel companies and promote the marketization of the hotel industry. The government, industry, and enterprises have gradually adapted to and learned the ways and means to manage and operate hotels scientifically and orderly in the market economy. The historic changes in the hospitality industry are unprecedented. After China's entry into the WTO, the hotel industry is facing new global challenges, and several noteworthy trends will emerge in its development in recent years.

3. Future development trends of China’s hotel industry

1. Relative excess supply, fierce competition, and slower development speed in the future.

From 1996 to 2000, the tourism and hotel industry increased by 354,000 rooms, with an average annual growth rate of 12.39, while the guest source growth rate during the same period was 4.0. Due to oversupply, excessive competition among hotel companies has resulted. From 1996 to 1998, the average occupancy rate and profit margin of hotels nationwide declined year by year, and industry-wide losses began in 1998. The three-year losses in 1998,

1999 and 2000 were 4.556 billion, 5.364 billion and 2.643 billion yuan respectively. This situation. It has curbed new investment, forced the hotel industry to slow down its scale expansion, and raised strategic issues such as controlling the total number of hotels and improving hotel quality.

2. New development investment points in the hotel industry will gradually move westward and optimize the geographical structure.

Since China’s central and western regions have relatively rich tourism resources, and at the same time, the country has successively introduced a series of measures to develop the central and western regions, some hotel investments will likely shift from the eastern and southern regions to the central and western regions.

With the further development of the economy in the central and western regions and the further development of tourism resources, the hotel industry in the central and western regions will further develop and become the new and most promising growth area for China's hotel industry. Overall, the total volume and grade of tourist hotels in various cities in developed coastal areas have reached a very high level. The central region is developing rapidly and is expected to reach a higher level in the past three years. The bottleneck is mainly in the western region.

3. The operation and management level of first-class hotels will continue to be in line with international standards, and efforts to develop economic hotels with international standards will become a new trend.

As far as competition is concerned, in the field of high-end hotels, foreign-funded hotels will continue to maintain their advantages, while domestic-funded hotels are mostly concentrated in the mid- to low-end areas. In the mid- to low-end segment, foreign-funded hotels have yet to take action. Economic hotels with international standards will become the focus of competition and construction in the future. Budget hotels are the focus of foreign hotel groups. According to the development forecast of China's tourism industry made by the Tourism Bureau, by 2020, the number of inbound overnight tourists will be 95-139 million, with an average annual growth rate of 5.7-7.75. The International Tourism Organization predicts that by 2020, there will be 1.6 billion international tourists worldwide, and China will have 130 million tourists entering the country, becoming the world's largest inbound country. In view of this trend, foreign hotel groups have identified China's economic hotels as a potential growth point. With the implementation of paid holidays, the improvement of transportation conditions, and the increase in people's income levels, domestic tourism has developed rapidly, and domestic guests have become a source of customers that hotels cannot ignore. The future demand trend is that budget hotels with simple decoration, cleanliness, convenient facilities and moderate prices will become the type of hotel industry valued by domestic tourists. In terms of quality and service, high-end hotels basically meet demand, while there are many mid- to low-end hotels, but they are far from international standards. This trend is not consistent with the growth trend of international and domestic economic customers. China has more than 240,000 large, medium and small hotels, guesthouses, guest houses and other accommodation facilities, of which about 10,000 are star hotels, accounting for 4. There are more than 230,000 and more than 96 accommodation facilities that have not entered the star rating range. Here, most are small and medium-sized hotels. Therefore, transforming existing small and medium-sized hotels to meet international standards will be the focus of future hotel industry construction.

4. State-owned hotels are separated from their original investment departments, and problems with restructuring are increasing, and risk prevention is becoming more and more important.

After joining the WTO, international hotels have entered the Chinese hotel market more easily, and competition in the Chinese hotel industry has intensified. Due to institutional reasons and lack of motivation for reform, state-owned hotels are at a disadvantage and are becoming increasingly passive. State-owned hotels are facing pressure from competition, reorganization, mergers and bankruptcy. State-owned hotels have to reform in the face of pressure. During the reform, they may be reorganized, sold or bankrupt. With the deepening of reform, the party, government, military, police and commercial banks have decoupled themselves from the hotels they invest in and no longer operate hotel investment business. Due to the change of owners and the resulting changes in system and location. It will cause the hotel's popular feeling to fluctuate, operation imbalance, management imbalance, and even performance failure. Hotel mergers and bankruptcies will lead to the layoff of a large number of employees and other social shocks. In this regard, it will become increasingly important to prevent social risks that arise during the transformation of state-owned hotels.

5. The development level of the hotel industry is increasingly correlated with the degree of human resource development.

When China's hotel industry first took shape, because there were relatively few hotels, the focus of competition was quantity as demand grew. Therefore, the initial development level of China's hotel industry is related to the number and scale of hotel facilities. As the number and scale of hotels increases, the level of facilities improves, and competition becomes fierce, the quantity competition in the industry turns to quality competition, and the development level of the industry is closely related to the development level of human resources. Because quality competition is mainly service competition, the core of service competition is the competition of personnel quality. The professionalism, technical level, professional psychological quality of hotel industry personnel, the combined effect of senior management talents and technical talents, and the formation of a well-trained talent team all affect the competitiveness of the hotel industry. China's domestically owned hotels are not very competitive. The key factor is not a technical problem, but a problem of personnel quality.

6. The groupization process of hotels is gradually strengthening, and international groups are entering the Chinese market in a big way.

In recent years, China’s hotel industry has begun to pay attention to the issue of groupization. By the end of 2002, there were more than 110 hotel management companies in China, managing more than 700 hotels, and the degree of star hotel groupization reached 7.2. Among the top 20 hotel groups in China, 12 internationally renowned hotel groups were selected and 8 Chinese hotel groups were selected. What is gratifying is that the operating scale of the eight selected hotel management companies in China has reached the standard of the top 300 international hotel groups, reflecting the substantial development of China's hotel groupization process. However, there is still a big gap between the collectivization status of China's hotel industry and that of international hotel groups. According to 2000 data, Shanghai Jinjiang Hotel Group, which ranks first in China and 57th in the world, only has 50 hotels, which is only 0.77 of Sundart Group. The number of guest rooms is 13,598, which is only 2.5 times that of Sundart Group. The tenth-ranked American Hyatt Group (Hyatt Hotels/Hyatt International, USA) owns 201 hotels and 86,711 guest rooms. In general, China's hotel groups have not yet formed a large joint supervision team: they have not formed large-scale, integrated and intensive operations; hotel groups have high costs, bloated institutions, many layers, and low efficiency; they are not well-known and the group's advantages are not obvious. From the perspective of development trends, it will be difficult for Chinese hotel groups to compete effectively with large foreign hotel groups in the short term. Therefore, the development of Chinese hotel groups will restrict the position of Chinese hotels in the international market

4. Weak wounds that cannot be ignored in China's hotel industry

1. A large number of three-star and below-star hotels are still suffering from long-term losses despite a good external environment.

2. Another small number of three-star and below-star hotels have good sales and high occupancy rates. However, the hotel seems to have reached a hurdle in its development. The enthusiasm of employees, sales performance, and service quality can no longer improve. A step.

3. Most four- and five-star hotels appear to be slightly higher in vertical comparison in the industry. However, in international comparison, China's high-end hotels are inferior in terms of strategic posture, management precision, and service. In terms of deepening and global operation, it is different from international hotels of the same level. The soft environment of most four- and five-star hotels in China is only equivalent to foreign three-star or even lower-level hotels.

4. China’s hotel industry is inefficient, with uniform operations and forms, unable to find differentiation and diversity, and has extremely little added value in international competition.

5. There is a big gap between China's local hotel talents and international hotel talents in terms of quality and training model. An unavoidable reality is that 70% of China's existing senior hotel management talents come from abroad, or have worked in foreign hotels Training experience. China still does not have a truly professional hotel management school, nor does it have a standardized and complete hotel human resources market.

5. In the future hotel industry, we can also see the following phenomena and trends

1. Hotels are lagging behind in terms of reservation technology, service technology, product design technology, etc. , so that competition within the industry can only focus on capital scale, related businesses, profit transfer and other levels for a long time.

2. The hotel industry is currently in a state of oversupply and new foreign investment is unlikely. However, overseas hotel management companies will accelerate their entry into the domestic market. The main ways to enter this field are: Competition in ownership acquisition, capital management, contract management, franchising, etc. will intensify. Large state-owned hotel groups have greater opportunities to seek foreign mergers and acquisitions.

3. In the long run, with the development of the economy and the globalization of wage levels, competition for talents will inevitably become the focus of survival competition in the hotel industry.

4. Whether it is "foreign capital" or state-owned hotels, they should follow the path of horizontal integration at the same level.

5. State-owned and private hotels are generally small and medium-sized hotels. In their development process, due to the policy environment and market mechanism, their development has been sluggish. In the future development, they will also suffer the greatest impact. But private hotels will be a trend in the future.

6. The competition in hotel marketing will appear in the diversity and effectiveness of the products provided by hotels. Developing diversified products according to changes in market demand is the magic weapon for hotels to win in the competition.

7. In terms of the tourism capital market, some qualified tourism companies will be able to directly issue stocks for listing and financing. Take the path of scale and diversified development through the capital market.

8. The hotel should scientifically and effectively segment the overall market based on extensive market research and select one or several market segments as its target market, and concentrate manpower and material resources. , conduct concentrated marketing. On the basis of concentrated marketing, hotels should highlight the differences between their own products and competitors, and use differences to gain competitive advantages.

9. Hotel culture is increasingly sought after by guests, and creating a unique hotel culture has become part of building a hotel's advantageous brand.

10. Due to the increasing competition and active labor market, the turnover of employees in the hotel industry has been accelerated.

11. Today, with the surging awareness of environmental protection, green guest rooms have moved from innovation to maturity.

12. With the update of high-tech technologies such as IT technology in this century, the innovation of guest rooms also shows traces of high-tech. Industry informatization and networking have become new trends