Full Season Hotel CEO Shen Yijun: The Future Of Mid Market Lies In Scale, Sinking And Chain

With the domestic epidemic under control, although the expected retaliatory rebound has not appeared, the domestic hotel industry is on the road of recovery.

Recently, the leading brand of domestic mid end chain hotels will open its 1000th store in Guangxi. In an exclusive interview with 21st century economic reporter, the CEO of all season hotels, Shen Yijun, said that 1000 hotels are an important milestone for all season hotels, and the brand's next goal is to expand the number of stores to 3000.

While maintaining the pace of expansion, the recovery degree of hotels since the outbreak has exceeded the expectation of the outside world. According to the latest data of hotels in the whole quarter, the overall recovery of RevPAR has recovered to 98% of the same period last year.

It is undeniable that despite the impact of the epidemic on the hotel industry, there are also opportunities. In the "post epidemic" era, the major domestic hotel groups are busy with two things: "horse racing" to continue to expand stores, and accelerate the upgrading of their hotel brands.

Shen Yijun told the 21st century economic report that the epidemic has changed the market demand, and the living space of single hotels has become narrower, and the residents pay more attention to brand and safety. At the same time, with the rise of young consumer groups, compared with price, quality and experience are paid more attention, and these become the growth space of middle end hotels.

After the epidemic, the major hotel groups increased the investment in the middle end hotels, and the race track competition became more intense. However, in Shen Yijun's view, learning from the mature foreign hotel market, hotel chain degree and the proportion of middle end hotels indicates that there is still a lot of room for development in the domestic middle end hotel market.

Where is the growth space of middle end hotel?

21st century: in the near future, the full season hotel will open its 1000th store in Guangxi. The number of 1000 hotels makes the whole season continue to consolidate the scale advantage in the middle end hotel. So, what is the current business recovery of the whole season hotel? The National Day golden holiday is coming. How about the hotel reservation performance in the whole season?

Shen Yijun: according to the latest data I have seen, in the past 20 days from September 1 to now, the overall recovery of hotels nationwide has reached 98% of the same period last year. This refers to the RevPAR data. It should be emphasized that the number of our hotels this year has been higher than that of the same period last year. Under such circumstances, the overall revenue of hotels in the whole season has not been affected, but also achieved a good degree of recovery, indicating that the brand attraction of the whole season is relatively good.

From the order data, this year's national day hotel reservation situation is higher than the same period last year. Of course, it will be different in some areas, which is also caused by the epidemic situation. In some places, it still needs time to recover due to the emergence of the previous and secondary outbreaks.

21st century: in the early days of the epidemic under control, the industry is looking forward to a retaliatory rebound. But in reality, this phenomenon did not happen. In this regard, how do you evaluate the current recovery trend of the domestic hotel industry and what are your expectations for the further recovery of the hotel industry in the near future?

Shen Yijun: when we talked about "retaliatory rebound", we compared this epidemic with SARS in 2003. However, this year's epidemic is different from SARS, and the economic background of the two outbreaks is also different. In addition, the external economic environment caused by trade friction between China and the United States is not the same as before. More than ten years ago, the scale and perfection of the hotel industry can not be compared with that of the present. Considering these factors, it is unlikely that there will be a retaliatory rebound.

However, I think the domestic hotel industry has recovered very well. This is mainly because the domestic epidemic situation has been controlled and the confidence of practitioners and consumers is rising. I am optimistic about the recovery of the whole Chinese hotel market. In the next three months, we are confident that our hotels will return to the same level of operation as last year.

21st century: apart from being a full-time Hotel CEO, from a hotel practitioner's point of view, do you think there is a new trend in the domestic middle end hotel market after the epidemic and the changes in the internal and external economic environment? Where is the growth space?

Shen Yijun: referring to the mature hotel market in Europe and the United States, at present, the proportion of medium and high-end hotels in the United States is about 50%, and the proportion of economic hotels is 20%, which is "olive type". At present, China is still "pyramid type", with the highest proportion of economic type, while the proportion of medium and high-end hotels is only more than 10%. In my opinion, the domestic hotel hierarchical model may maintain a "pyramid" structure, but the proportion will change, that is, the economic hotel accounts for about 50%, the middle end accounts for 30% to 40%, and the high-end hotel maintains at 10%. Therefore, the development potential of middle end hotel is still great.

The target of mid end hotels is the middle class or people with certain consumption power. Including the whole season, it is basically around the first and second tier cities. However, at present, many young middle-class consumers are emerging in the third and fourth tier cities. Compared with the price, they pay more attention to the quality experience, which makes the middle end hotel have the possibility of further sinking into the third and fourth tier.

The proportion of the whole domestic mid end hotel market will not only increase in the future, but also become an inevitable trend. Another trend is that after the epidemic, the degree of domestic hotel chain will be greatly improved. Because of the epidemic situation, consumers' mentality, safety awareness and brand awareness have been enhanced, which has become the driving force of chain operation.

"21st century": at present, all kinds of hotels are emphasizing on grasping young consumers when upgrading their products. Some hotels even create "IP" to attract this consumer group for customers. What are the plans of all season hotel?

Shen Yijun: our all season hotel positioning is to meet the common core needs of the largest number of middle class people, not just personalized needs. At present, there are about 400 million middle class groups in China. In 2019, the number of guests received by the hotel has reached 40 million in the whole season, and according to this growth rate, it may exceed 60 million next year.

In order to maintain efficiency, we choose to meet the core needs of most groups from the perspective of product standardization. At the same time, we also hope that this scale-up can bring residents a "good but not expensive" experience. For the personalized experience needs of residents, we hope to achieve through service.

Which is more important, quantity or quality?

21st century: the cost of mid tier hotels is bound to be smaller than that of economy hotels. However, under the fierce competition in the middle end hotel track, different development strategies have emerged. For example, some hotel groups believe that in the initial stage of development, they should not excessively pursue the number of Hotels with a single brand, but carry out brand intensification to ensure the quality of each middle end brand. So in your opinion, which is more important, quantity or quality?

Shen Yijun: now Huazhu group has a number of middle end brands. In addition to the whole season, there are orange, Xingcheng and MANXIN. In my opinion, for mid tier hotels, quantity and quality are equally important, and the two are balanced. But first of all, quality is the customer experience.

From the beginning of the establishment of this brand to the scale of 1000 stores, only such a size can improve efficiency, reduce costs and enhance bargaining power with the help of scale advantages. In addition, the domestic mid end hotel market has a lot of development space, which also gives the whole season such space to implement large-scale.

There is no doubt about the importance of quality. Quality means the experience and reputation of the residents. Without quality, customers will be lost. However, without scale, even if a hotel can create a customer experience, it will create a better experience because the cost can't be controlled. As a result, the business model is not supported and the return on investment is reduced, which leads to a "dead end".

"21st century": quality assurance is equivalent to the need to keep and improve the check-in experience, which means that product upgrading will become a normalization. However, one phenomenon is that the upgrading of products from budget hotels has also "upward" scrambled for customers of middle end hotels. For example, will the upgrade of Hanting compete with the whole season?

Shen Yijun: China's hotel market has a vast space. Everyone can develop in this market, which is determined by the market background. The positioning of each hotel is determined by its own business model. The upgrading of Hanting and the whole season is controlled within a certain cost. From the 3.0 version to the next 4.0 version, and even the future 5.0 and 6.0 version upgrades, the cost should not be much different from the original. Therefore, no matter which level of hotel brand, its upgrade should be based on its own business model.

21st century: you just mentioned that the improvement of quality should be based on the scale. So, what are the next expansion targets of the all season hotel? What are the plans for product upgrading?

Shen Yijun: at present, the number of hotels in the whole season has exceeded 1000. In five years, we plan to increase the total number of stores to 3000. The vision of the whole season is to become a world-class hotel brand. In terms of profit and scale, it will enter the world-class track by 3000. But "greatness" is not only about scale. As an Oriental brand, its "moderate" values, humanistic feelings and hope that more guests "feel the natural appropriateness of the East" are our goals beyond the scale.

We originally set a three-year product iteration cycle, which is based on consumption upgrading and changes in the experience and aesthetics of residents. In the eight to ten years since the establishment of the whole season, our product has been iterated to version 4.0, still maintaining the above iteration speed.

21st century: product upgrading iteration is one of the guarantees to improve customer acquisition ability. At present, the major hotel groups have "sacrificed" brand upgrading moves. Compared with its competitors, how will the hotel maintain its ability to attract customers throughout the season?

Shen Yijun: I think that by doing three things, the ability to win customers will gradually become prominent. First, brand, which is the first thing, is trusted and will become the first choice of residents without publicity; second, traffic, one of our core competitiveness is relying on the members of the whole Huazhu group, which can guarantee the source and income of customers even in the state of expansion in the whole season; third, technology, whether domestic or foreign stores, our system can It is also the core competitiveness of the whole season.

One of the most important channels for you to increase your customer flow in the 21st century. After the impact of the epidemic, in addition to the use of the "Huazhu club" of Huazhu group, will other traffic channels be widened throughout the season?

Shen Yijun: of course. The relationship between the whole season and Huazhu group is complementary. Because of the residents' trust in the brand of the whole season, many consumers who were not originally "Huazhu club" have become its members. At the same time, because of the continuous increase of the flow of "Huazhu club", a lot of customers are transported to new stores in the whole season. So from this point of view, traffic is not only a matter of "Huazhu club", but also a matter of our brand in the whole season.

21st century: in fact, there is a competitor in the middle end hotel, which is the non-standard accommodation represented by folk custom. In this regard, do you think middle end hotels need to worry about this competitive pressure?

Shen Yijun: non standard means that it is difficult to scale. The advantages of middle end hotels lie in efficiency and brand. From the hotel itself, we can be more large-scale, more efficient.

From the whole hotel market, the market space is very broad, each category will have a certain development. The key is whether the hotel brand can do its own thing well. I don't think we need to think about competition or the Red Sea, but we are immersed in the study of market demand. China's hotel market has huge potential, so it doesn't need to worry too much.

"Fierce battle" of middle end Hotels: competition and upgrading of quantity, quality and flow