Why is budget hotel a new trend of hotel industry development in China?

Four Trends in the Development of Economy Hotels in China

1. Most one-,two-and three-star hotels and some social hotels have been replaced by budget hotels.

According to the statistics of authoritative departments, in recent years, the occupancy rate of domestic star-rated hotels is around 60%, and its gross profit margin is around 20%, and hotels below three stars have suffered serious losses.

In the past five years, budget hotels have rapidly occupied the market in first-and second-tier cities with an annual opening rate of more than 100%, and will rapidly expand to third-and fourth-tier cities in the next few years. Among them, there are both the rapid expansion of national brands and the influx of regional brands, and a large number of star-rated hotels have been transformed into budget hotels. The average occupancy rate is above 80%, and it is as high as 95% on holidays. Its gross profit margin can reach 40% or even more than 50%, and it is still attracting the fiery investment desire of capital.

According to the Survey Report of Economy Hotels in China in 2009, there are more than 4,000 economy hotels in China, but they still account for only 29% of all star-rated hotels in China (about 1.4 million, excluding a large number of social hotels). Experts predict that by 2020, there will be more than 10000 budget hotels in China, accounting for about 70% of the hotels in the market. China budget hotels are in the initial stage of rapid development, with great development potential, and will become the main force in the hotel industry market in China.

The fundamental reason behind this trend is that people's consumption consciousness is developing towards calmness, maturity, consumption difference and personality difference. They no longer pursue luxury, high price, well-equipped high-star hotels, but increasingly favor affordable, clean, friendly service, comfortable and fast economic hotels.

Second, most single or small chain economy hotels are integrated by national chain brands.

The national chain brands have stronger brands, unified quality and service standards, more professional management and more outlets, which undoubtedly have obvious competitive advantages.

Since 2007, with the gradual intensification of competition, especially the increase of cost and the decrease of occupancy rate, single or small chain economy hotels are under increasing pressure, and the competitive weakness is becoming more and more obvious, which gradually widens the gap between the occupancy rate and the average house price with national chain brands. In the next 5- 10 years, most single or small budget hotels will be replaced or merged by national chain hotels. At present, the top 10 budget hotels only account for 38% of the domestic market share, and this proportion will increase to over 80%.

Third, the advantages of international chain brands over local brands will become more and more obvious.

With the rapid rise of China, the 2008 Beijing Olympic Games and the 20 10 Shanghai World Expo, as well as the increasingly open market in China, China's tourism industry will develop at a high speed in the next 10-20 years, attracting a large number of foreign tourists. At the same time, domestic tourism consumption will increase and upgrade rapidly, and consumers' quality and service level to budget hotels will be improved.

After adapting to the China market, international chain brands have the advantages of international quality standards and service standards, international loyalty to consumers, more advanced business philosophy, more professional management ability and stronger financial strength, which will become more and more obvious compared with domestic brands.

Although local brands with flexible and quick response start faster, they often lack stamina, and their competitive disadvantages will gradually emerge-the current pattern of local brands leading the economy hotel market will be changed. Many local brands will face the great test of continuous survival, and even face the fate of being reshuffled.

Fourthly, franchise mode will surpass direct operation mode and become the mainstream of chain economy.

Looking at the great development history of foreign budget hotels, the track of franchise chain operation is the best way for hotels to develop successfully in the world. More than half of the total number of hotels in developed countries such as Europe and America is a franchise chain operation model.

The chain operation of budget hotels is the inevitable result of the development of two groups of contradictions: first, the space limitation of hotel sales and the dispersion of consumers; Second, the contradiction between the hotel's pursuit of economies of scale and the weakness of single hotels.

In fact, these trends have been confirmed in mature markets. The American hotel market has experienced a similar process in the past 30 years. At present, the ratio of budget hotels to all star-rated hotels in the American market is 7: 3, and more than 80% of budget hotels are occupied by the top 10 chain brands. In the process of this industry transformation, Super 8 hotel in the United States, which is dominated by franchise chains, has experienced a glorious course from opening the first budget hotel to becoming a leader in the budget hotel industry.