65438+February 18, the 2 1 Century Accommodation Industry Summit Forum (2020) hosted by 2 1 Century Business Herald was held in Maowen Hotel, Shanghai Bund. Tang Ming gave a keynote speech on "Investment and Development Opportunities of China Hotels under the New Normal of Dual Circulation" at the forum, and shared a lot of views from the dual perspectives of hotel owners and management companies.
Tang Ming said that there are two key words for the hotel's future investment: "Heavy position in China, sinking the market". He believes that the investment entry threshold of first-and second-tier core cities will be improved, and high-quality assets will continue to increase in value. At the same time, third-and fourth-tier cities have vast markets, representing new investment opportunities and consumption scenarios. However, although the market sinking has become the main driving force for the future development of major hotel management companies, the road to profitability is still difficult. According to Tang Ming, the three most important foundations to promote the development of international hotel brands in China are "customers, systems and talents", but in the sinking market, China national brands and domestic hotel management companies have more room for development. Therefore, he shouted "the era of national hotel brand has arrived"
In his speech, Tang Ming also shared the diversified experience of Shimao's hotels in innovating product models and realizing hotel revenue. He pointed out that the innovation of hotel asset management operation and maintenance ideas is reflected in new channels, new scenarios and new integration.
The following is the full text of Tang Ming's speech:
China's economic development in the next five years, some experts have given five trends:
(1) loose monetary policy. It can be seen that interest rates will go down, asset prices will go up, and the core assets of first-and second-tier cities will be maintained and increased.
(2) Adjustment and deepening of industrial structure. A large number of small and medium-sized enterprises have become bigger and stronger through restructuring, deepening all or part of their systems and reaching international standards. For the hotel industry, after discussing the epidemic situation, the trend of chain may be further strengthened, and the viability of single hotels is relatively weak, so there will be more reorganization.
(3) scientific and technological development. The change of digital economy is also true for the hotel industry in China, and the intelligentization of hotels has made hotels in China already in the forefront.
(4) Accelerate the process of urbanization. 400 million people have reached the middle income level, and 654.38+0.6 billion people will enter the middle income level in the next five years. This is the great potential for the development of high-end hotels in China in the past few years, because there are so many new customer groups, which is very good news for our industry.
5. New regional pattern. There are many new development zones, and now more attention is paid to the development zones in Greater Bay Area, Yangtze River Delta and Beijing-Tianjin-Hebei.
In the future, the overall hotel investment can be summarized as "heavy domestic positions and sinking market". First of all, the entry threshold for investment in first-and second-tier core cities will increase, and high-quality assets will continue to increase in value. Second, third-and fourth-tier cities have vast markets, representing new investment opportunities and consumption scenarios.
Shimao Group has owned 16 years of hotel investment, development, operation and management, and adheres to the development model of urban landmark buildings and international brand characteristics. Today, everyone is also an important hotel in Shimao, which is invested by Shimao Group and managed by Hyatt Group. There are many landmarks and famous hotels like this. Intercontinental Shanghai Shenkeng Hotel is also an important hotel invested by Shimao Group. In this regard, we have more than 50% good hotels, and the continuous appreciation of assets in the future can be seen.
Third-and fourth-tier cities have a vast market, and our Shimao Group also deepens local experience and international brands from four aspects of investment and financing supervision to ensure the investment income of hotels in the sinking market. As we all know, Shimao Group and Starwood Capital have established a joint venture company. We called it Starwood at first, but later we wanted to make it simpler and called it Shimao Starwood Hotel Group directly. In the future, it will have its own brand, with Shanghai market and third-and fourth-tier cities as its development prospects.
1, heavy positions in first-and second-tier cities can be seen: (1) On the one hand, new construction in first-tier cities is limited. No new hotels will be built within the Fourth Ring Road in Beijing, and no new hotel business licenses will be issued. Shanghai's overall construction land will only decrease rather than increase. (2) The second aspect is that the cost of stock transformation is very high, and the rent level of first-and second-tier cities is much higher than that of third-and fourth-tier cities. Under such circumstances, in the first-and second-tier cities that have already opened, there are great opportunities for maintaining and increasing the value of high-quality hotel assets, which is our judgment on hotel assets.
Shimao Group is located in the core city. We have 25 hotels with heavy assets, including 9 international brand hotels/KLOC-0 and 6 private brand hotels. Basically, more than 50% of them are in the core areas of first-and second-tier cities, and they are also landmark buildings.
Because when we were developers, we joined hands with international brands to build a brand moat and continue to maintain the sustainable development of these hotels in the future.
2, sinking market, hotel investment and profit.
The sinking market is a "value depression" with strong consumption power. The absolute value of rural per capita disposable income and consumption expenditure is not high, but the growth rate is higher than that of urban residents. Moreover, in third-and fourth-tier cities, the pace of life is relatively slow, the cost of living is relatively low, and the pressure is relatively small. They have more time and energy to spend. Therefore, the improvement of future consumption power in third-and fourth-tier cities cannot be ignored.
The sinking market has become the main driving force for the future development of major hotel management companies. On the left is the proportion of online hotel reservations in domestic hotel tourist destinations in China in the quarter of 20 19. It is seen that cities below the third line account for nearly 28%, exceeding the proportion of first-tier cities. On the right is the number distribution of contracted hotels in 20 17-20 19 cities, and the number of cities below the third line far exceeds that of first-tier cities.
The sinking market is huge, but everyone in third-and fourth-tier cities will face the same problem. The profitability of hotels is very difficult, because the price of the whole sinking market is still relatively low, especially the average hotel price, so we can also see the overall sinking market opportunities here, but the competition is intensified, income barriers and costs are high, so the gross profit margin of third-and fourth-tier cities is actually constantly challenged.
Under such circumstances, with the arrival of the new era of hotel industry, the opportunity era of national hotel brands has arrived. At this time, I believe that the development of China hotels in the past twenty or thirty years is mainly led by international brands and international management companies. So far, I feel that I have entered the era of brand opportunities for ethnic hotels.
The advantages of ethnic hotels in the sinking market are increasingly prominent. I put three here: customers, systems and talents. These three points are the three biggest advantages of international management companies and international brands when they entered China. Twenty or thirty years ago:
(1) tourists. More than 80% of the guests in all our hotels are international guests, and the proportion of domestic guests is very small, but so far it has reversed, and 80% are domestic guests. The entry of international brands into China can indeed bring huge system support to China hotels, and a large number of foreign tourists and business travelers can guarantee the hotel's income. They had an advantage in terms of tourists at that time.
(2) system. They have a mature management system, including hotel system, IT system and membership system. At that time, they brought international leading technology to China.
(3) talent. At that time, there was no professional hotel management training major or professional management talents in China, but a large number of international hotel management talents were hired.
In the past development process, the advantages of international management companies in terms of customers, systems and talents are also the three most important foundations for their continuous development in China. In the new era, we see advantages in the sinking market. The brands of international management companies are getting weaker and weaker, but the opportunities for national brands are getting bigger and bigger.
The first is the source of tourists. China's growing spending power. At present, the proportion of domestic guests in each hotel is increasing. In third-and fourth-tier cities, more than 95% may be domestic guests, and few foreigners. Under this premise, the very strong international sales system and platform of international management companies have an impact on the business of this hotel. For example, the third-and fourth-tier cities are weak, and the enhancement of China's consumption power will bring more opportunities to national brands.
The second is the system. Many years ago, international management companies had advanced management systems and systems. In terms of management system, after more than 20 years of development, we also thank international management companies for training a large number of hotel managers in China, including myself. I have worked in international management companies for more than 20 years. We have studied the perfect hotel management system of international management companies. IT system, management system, sales system and membership system are all the same at present. International management companies have a long history, but the aging of the whole system and backward technology have become very obvious shortcomings. On the other hand, China's leading position in science and technology has surpassed the international level in many aspects. At present, the effectiveness of PM market, CRM system and sales platform system, including membership system, built by our domestic national brand hotels has been greatly improved. In this respect, I think China Hotel Group has the possibility of overtaking in a corner because our own technology is already ahead.
The third is talent. As I mentioned just now, through training a large number of professional hotel management talents for China in the past 20 or 30 years, we have an international vision and understand the essence of international management companies. At the same time, as we come from China, we are more grounded, have a better understanding of the market, and can make changes faster when the market changes.
It's actually quite simple. In this year's epidemic, I think the performance of international management companies is very different from that of domestic management companies. After March, domestic hotel management groups, whether high-star or low-star, have made great moves to cater to the market, resist the epidemic and ensure hotels to reduce losses better. The response of international management companies in this regard is relatively slow. Of course, they have their objective reasons, because all their decisions need to wait for instructions from foreign headquarters thousands of miles away. But the executives of these foreign headquarters are all sitting in the United States, Britain and France, and they can't understand what the real China market is like. China's reaction speed will be faster.
Therefore, the market will sink in the third and fourth lines in the future. In terms of operation, customers, systems and talents of China national brand domestic hotel management companies will have more room for development.
Take Shimao Hotel as an example:
(1) On the one hand, we have strict "cost control" during the investment period. This is the data of our five-star hotel in Maoyu. Comparing the data of our own international five-star hotels, we can see that the cost of Jian 'an is saved by more than 50%, and the cost of single room is saved by 47%. In the early investment stage, through effective design, effective construction and effective centralized procurement, the price is controlled at an appropriate cost, making the investment more reasonable and effective.
(2) On the other hand, in the preparation period of establishing an efficient team, we should be "efficient and energetic" and control the operating costs. This is Chengdu Maoyu Hotel, which has set a five-star international benchmark with ourselves. Basically, we saved nearly 40% on the first operation. At ordinary times, our own hotel costs more than 30 million yuan, and our hotel spent180 thousand, which is why all our Shimao hotels opened 50 days earlier. Originally, we were international.
⑶ "Open source and reduce expenditure" during the operation period.
In terms of throttling, our labor cost is ahead of the industry average ratio of people to rooms, optimizing labor cost and maximizing input and output. Here is a productivity index. The total income excluding your salary and related expenses is usually 3.6 in first-tier cities, 3. 1 in second-tier cities, 2.8 in third-tier cities and 3.84 in Chengdu Maoyu.
We also have a lot of refined cost control, and diversified income ensures that the hotel will open source and reduce expenditure during its operation. Fourth-tier city, Taizhou, Jiangsu We have a five-star hotel, which is the only five-star hotel in Taizhou that can make a profit at present. Four or five other international management companies and local five-star hotels are still losing money. In this regard, we have done a lot of meticulous management to ensure that our hotel can still make a profit and not lose money in a more challenging market.
We just talked a lot about cost control. The development of hotels will eventually be open source, and the income will increase the most. We have made many diversified attempts in innovating product models and realizing hotel revenue, which is also a problem that everyone needs to consider after the epidemic.
We did it: new channels, new scenarios, and new integration.
We build and promote new channels through many more platforms, such as Ctrip's live broadcast, Flying Pig flagship store, WeChat Mall and WTO.
In the new scene, according to the changes of the guests' demand for hotels after the epidemic, we have created many new products to meet the different needs of the guests. In the future, I believe that the market segments of the hotel industry will become more and more detailed, and each hotel should make its own characteristics.
In the new integration, our owner company established our own Shimao Hotel Resort brand on the owner's platform, and put our international brand hotels and independent brand hotels together for sales and promotion.
New channels. Dare to be the first, determined to generate income. We are the first owner company to open a flying pig flagship store and the first official WeChat mall. We also took the lead in the live broadcast room of Ctrip boss. I was also lucky enough to have a live broadcast with General Manager Liang, which was very successful.
New scene. We build hotel products according to different consumption scenarios. Just now, Teacher Ye mentioned that it is very important to sell what products during live broadcast. We can't just sell the house, but create some organic products to attract guests and promote your total income. We have made many new attempts in this regard. During the epidemic, we emphasized weekend trips to local life, including in Shanghai. Shimao Shenkeng Hotel is an example. At that time, 990 yuan's package was promoted to encourage local residents to spend weekends here. I remember it very well. I sold 500 thousand in advance in the first half day.
New integration. Breaking brand barriers and promoting "Shimao Hotels and Resorts" with the overall thinking of the owners have won a lot of praise. We have also done a lot of cross-border, including cross-border with some well-known brands, and recently promoted "Shimao Hotel X Max Mara" afternoon tea.
New script. Brand and product innovation, and constantly explore the diversification of hotel income. The most famous thing is that we cooperated with Li Ning to make sportswear, as well as tea, three and a half meals of coffee and panda crafts. There are also many brands of products that cross the border with China's leading products, including mattresses, Shang Tang Intelligent Technology, Himalayan Radio, and Fan Xiang has a Himalayan Fan Xiang Radio. There is also the empowerment given to us by Shimao Culture Company to ensure that we have a better cultural heritage. Finally, there are multi-channel promotions.
New retail. Just mentioned Li Ning, three and a half meals of coffee, panda brewing and tea, and we made a lot of special offers to sell in hotels. On the one hand, it improves the guest experience, and at the same time, it increases the income for the hotel. Of course, we also have a good incentive mechanism to increase employees' income.
New operator. We have Fan Xiang Radio Station, and at the same time, we launched the first brand Fan Xiang magazine "Vep with Spectrum" to promote our brand and do our public welfare activities.
Time is limited today. Finally, take a moment to show you that our Shimao Starwood Hotel hopes to become a luxury holiday brand in China, called Yurong. We have made this brand a luxury hotel brand in China. This is the first one we opened in Wuyishan two months ago, creating a hotel life atmosphere in the Song Dynasty. I hope you can have a look at our special service and some scenes and experiences of hotel life. I also hope that you will have the opportunity to give us valuable advice.
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