"Strong recovery" and "quality upgrading" are the judgments given by Xu Shuguang, chairman of Green Hotel Group, for the hospitality market in 2023 and 2024.
As a large domestic hotel chain group, Green Hotel Group will take the lead in recovering business activities in 2023, with strong demand for accommodation, and many indicators will exceed the same period in 2019. At the same time, it has also continued to focus its expansion on lower-tier cities. According to Xu Shuguang, among the 480 new hotels to be opened, 2 3 hotels will land in third- and fourth-tier cities. However, there are still areas where the speed of recovery is not as fast as the hotel market recovers.
1. Challenges such as the business travel market not recovering as expected. In Xu Shuguang's view, in 2024, the hotel market will no longer win by quantity, but will aim to improve quality.
A number of operating indicators exceeded the same period in 2019.
The hotel industry can be described as one of the fastest recovering industries in the tourism industry in 2023, and with the surge in demand, GreenTree Hotel Group surpassed 2019 in many indicators. Xu Shuguang revealed that from January to September 2023, the average revenue per saleable room (RevPAR) of Green's overall hotels increased by about 10% year-on-year compared with 2019Revenues reached 12$5.5 billion, which has exceeded the whole year of 2022 and 2021. At the same time, the hotel occupancy rate reached 81 in the third quarter2%, up from 71 in the same period in 20221%。
Regarding the third-quarter results, Xu Shuguang also said: "Achieve revenue of 4600 million yuan, a year-on-year increase of 1529%, net profit reached 11.7 billion yuan. ”
The rapid recovery of business data is supported by the surge in demand for summer leisure and vacation, as well as the recovery of business activities. According to data from the China Tourism Academy, the number of domestic tourists in the country reached 18 this summer3.9 billion person-times, achieving domestic tourism revenue of 121 trillion yuan, this summer's tourism popularity is significantly higher than the same period in 2019.
In terms of business activities, taking Beijing as an example, according to a previous survey by Deep Blue Think Tank, many high-end business hotels in Beijing have recovered rapidly after the Spring Festival, with an occupancy rate of 80%, and even some hotels reaching 90%. At the same time, in the second half of the year, the "Interpretation of Domestic Scheduled Passenger Flight Data for the 2023 Winter and Spring Season" released by Flight Manager shows that from the perspective of route frequency, the top 10 city lines in the winter and spring seasons are all business lines. The gradual increase in business activities has also led to a strong recovery in the hotel market.
Although the overall performance of GreenTree Hotel is recovering rapidly, there are certain differences in the recovery speed of different cities. He pointed out that the recovery rate in first-tier cities is very fast, while in third-tier cities and below, it is relatively slow. "This is directly related to the change in consumer business travel demand, in the past three years, business tourism, technology exchanges and other demand concentrated in first-tier cities, so the hotel market in first-tier cities has recovered faster, in the context of slowing domestic economic growth, which is very rare. ”
2 3 New stores are concentrated in third- and fourth-tier cities.
The rapid recovery of business indicators and performance has also strengthened the confidence of many franchisees in the hotel market. Talking about the opening goal of 2023, Xu Shuguang said that by the end of 2023, Green Hotel will open a total of 480 new hotels throughout the year, of which more than 2 3 hotels are concentrated in third- and fourth-tier cities.
Overall, while the recovery of first-tier cities is still in the lead, the development potential of third-tier cities and below cannot be ignored. Xu Shuguang and his team were pleased to find that after the end of the third quarter, some markets have undergone new changes. The overall RevPAR of Green Tree Hotel's characteristic brand snow hotel in Xinjiang exceeds 2,000 yuan, and consumers are increasingly favoring in-depth tours with characteristic ecological and natural environments, and staying in characteristic hotels that combine unique local tourism resources.
Talking about the reason for such a preference for lower-tier cities, Xu Shuguang said frankly that the chain rate of third- and fourth-tier cities is not as high as that of first- and second-tier cities, so third- and fourth-tier cities have a large stock market, and they are also the main areas for improving hotel quality, so it is not necessary to expand all of them into new incremental hotels, which can be existing hotels for replacement or survival of the fittest.
At present, all major hotel groups have the demand for layout in third- and fourth-tier cities, and the quality of hotel products and services needs to be improved. Hotels need professional teams in design, decoration, preparation, operation and management, and Green Hotel is relatively mature, so the competitiveness and bargaining power of the hotels renovated according to this model are much higher than those of independent hotels, and they have great advantages in the layout of third- and fourth-tier cities. Xu Shuguang said that with the development of science and technology, marketing channels are also undergoing earth-shaking changes, and the operation of hotels cannot just wait for the rabbit.
He also believes that in the future, the market share of chain hotel brands in first- and second-tier cities will be relatively saturated, so every next step will be to move towards more third- and fourth-tier cities and below.
The business travel market faced challenges in the fourth quarter.
The rapid recovery in the first three quarters has boosted the confidence of hoteliers, but as the market has shifted into the off-season, the pressure on many hotels has also begun to increase sharply.
Xu Shuguang mentioned that throughout the hotel market, the recovery of each enterprise is uneven, entering the fourth quarter, the supply is relatively fixed in a short period of time, but the elasticity of demand is larger, so that many hotel room rates have been greatly reduced, and there are still challenges for the recovery of the annual performance of some small and medium-sized hotels.
It is undeniable that the arrival of the off-season is a key node for the domestic hotel industry as a whole. According to the "China Hotel Market Prosperity Survey Report for the Fourth Quarter of 2023" released by Horwath Management Consultants, the domestic demand market has entered the stage of normalized operation, and respondents' expectations for the domestic tourism, business and conference markets are still relatively positiveHowever, compared with the previous quarter, the prosperity index of each demand market has declined.
In this regard, Xu Shuguang gave the solution of "seizing the business traveler group and making its own characteristics". He pointed out that from the perspective of many indicators, it is not yet seen that the cultural tourism market in the fourth quarter will be as hot as in the third quarter, but by the end of the year, the conference and exhibition market will begin to heat up, so hotel groups need to seize the business market and differentiate themselves from other hotels through the characteristics of their own hotels to further attract customers.
Cut into the health care segment.
The changes in the market in the fourth quarter can also give a glimpse of some trends in the development of the hospitality market in 2024. Xu Shuguang said when talking about the next development, now, Green Hotel Group will no longer blindly pursue quantity and expansion, but to find standardized, high-quality products. According to the financial report released by Green Hotel, as of September 30, 2023, Green Hotel has a total of 4,185 hotels, 130 new hotels opened in the third quarter, and 181 new hotels opened in the same period in 2019.
In September, the General Office of ** issued the "Several Measures on Unleashing the Potential of Tourism Consumption and Promoting the High-quality Development of the Tourism Industry", aiming to enrich the supply of high-quality tourism, release the potential of tourism consumption, and promote the high-quality development of the tourism industry. With the support of the policy, Xu Shuguang also led the efforts of Green Hotel to high-quality development. "2024 is the first year of high-quality development of the hotel industry. This is also Xu Shuguang's judgment on the development of the hotel market next year.
From the beginning of 2023, the group will increase efforts in the high-quality standardization of products and services, through digitalization and standardization, the products from design, decoration to operation and management, in accordance with high-quality standardization to develop, to give guests a different feeling and experience from the past independent hotels, this measure will be continued in 2024. Xu Shuguang further said that the existing hotels need to be upgraded. For hotels with serious aging phenomena, Green Hotel is also trying to balance the financial needs of franchisees. Because it is necessary to make up for the losses and operating problems in the past three years, the income in 2023 is not enough to be used for upgrading, and on the whole, the speed of upgrading in 2023 is not as expected, but it does not affect the continuous upgrading and transformation in 2024 to improve the quality of guest rooms.
Xu Shuguang also said that Green Hotel is currently tilting a large number of management resources to meet consumer psychological expectations, and create high-quality, more unified hotel products and service quality to the mass consumers. In 2024, Green Hotel will continue to expand the market with standardized products.
While the hardware facilities are upgraded and transformed, the services and experiences provided to consumers also need to keep up. Xu Shuguang also told the Beijing Business Daily reporter that the next step will be to start with value-added services such as breakfast, guest rooms, bedding and front desk consultation, and slowly strengthen standardized and standardized operations.
In addition to improving services, operating market segments is also one of the strategies for 2024. Xu Shuguang said that in addition to standard business hotels and mid-range hotels, Green Hotel will also add some hotels and special hotel products with the theme of health and wellness elements in the future.
In addition, in response to the store opening target in 2024, Xu Shuguang revealed that the specific plan depends on the overall situation in the fourth quarter, and it is expected that it will be further improved in 2024.
For 2024, Xu Shuguang also has new expectations for the new look of the market, "In 2024, consumers' demand for tourism products, especially the quality of leisure and vacation tourism, will continue to be strong, so how to ensure quality and quantity, so that everyone in the industry chain, including consumers, hotel investors, franchisees, etc., to achieve a win-win situation, is an important topic of consideration for Green Hotel and the entire hotel industry."
Beijing Business Daily reporter Wu Qiyun.