"I haven't had time to take a closer look at what the industry has to say about it. ”
Zheng Nanyan said in an interview with ChinaTravelDaily on February 1. At this moment, it has been ten days since Marriott and Dehao announced their cooperation. After the press conference on the same day, the discussion on this matter in the tourism and hotel industry was noisy, and a consensus was gradually reached in the industry: Marriott and Dehao's hand-in-hand was "unprecedented", creating a certain industry precedent.
Zheng Nanyan expected this: "The cooperation between Dehao and Marriott must have surpassed the imagination of many people. ”
game changer
It brings new possibilities for Sino-foreign hotel cooperation
This is not the first time that Zheng Nanyan has broken industry conventions: in 2014, Zheng Nanyan, then chairman of Plateno Hotels Group, teamed up with Hilton to bring its brand Hampton by Hilton to China; In 2022, as the executive chairman of Dehao Group, Zheng Nanyan launched a membership system that calculates points based on "stay time"; In 2023, the membership system will be completely renewed, and the name will be changed to "Baida House", which has caused heated discussions.
In 2024, Zheng Nanyan will once again join hands with Marriott to open a new model of cooperation between Chinese and foreign hotel groups. According to reports, the two parties will jointly promote the development of Marriott's Best Choice hotel brand in Chinese mainland. In the next few years, it plans to develop 100 dual-brand hotels under Dehao's brand + Best Choice.
One stone stirs up a thousand waves.
After the official announcement, the industry has been hearing about the cooperation of Chinese and foreign hotel groups, and for peers, this cooperation is tantamount to an industry innovation. It has been reported that Dehao Group is known as "game changer" in the industry, from the brand to the format, to the user gameplay, and membership logic, it is breaking industry conventions again and again; This time, Zheng Nanyan has brought new possibilities to the cooperation model of Chinese and foreign hotels.
But it was not easy to go from idea to implementation, and it took 22 months for Marriott to work together to succeed.
Marriott talks about things differently than we've done in the past. Zheng Nanyan told ChinaTravelDaily that many times some bosses like to make a decision first, and then the two teams will run in the specific details, which is easy to find a lot of stuck points and difficult to land. But from the very beginning, Marriott pulled up all the departments involved such as brand, membership, and IT to talk about cooperation with Dehao: this communication method has no other disadvantages except for slowness.
The negotiation cycle itself highlights the peculiarity of this partnership: a local Chinese hotel group has never joined forces with an international hotel group so deeply. "We decided from the beginning that both sides would bring their core resources to the talks. Zheng Nanyan said that this is why there is now a comprehensive cooperation between Dehao and Marriott in franchising, brand co-branding, and membership system interoperability.
Zheng Nanyan gave an example here: "The membership system is Marriott's core resource." It is understood that in 2016, Marriott completed the acquisition of Starwood Group for $12.2 billion, after which the brand and membership systems of the two sides were integrated to create the largest customer loyalty program in the travel industry - Marriott Bonvoy, which currently has more than 1900 million members. In the year of the merger, Marriott expects the new membership system to increase its bargaining chips with OTAs, saving 2$500 million in marketing spending.
In the domestic market, the membership system is also the core asset of the hotel group. According to data, from 2018 to 2019, Huazhu's "first-class booking channel revenue" accounted for 24-29% of domestic hotel franchise revenue; In 2021 and 2022, this number further grew to 29-32%. Analysts describe this earnings as "extremely profitable".
It is more difficult to touch the core resources than to touch the soul, but the cooperation between Marriott and Dehao has done it this time, like two pieces of a puzzle, put together in the most suitable position for each other.
This is also the reason why Marriott has cooperated with Dehao with the best choice soft brand.
If Marriott comes out with a hard brand, it will be difficult for our hotel brands, such as New Century Mingdu, to be compatible with each other in terms of hard standards. Zheng Nanyan believes that users of high-end hotels are not pursuing the same standards - if they can provide more diversified hotel experiences on the basis of high-end tonality, they will be more popular with guests.
Caption: New Century Mingdu brand, a subsidiary of Dehao Group.
Experience innovation
Build on the past "success mode" and upgrade again
Some data point out that in recent years, Marriott's expansion speed in the Chinese market has lagged behind Hilton and Intercontinental's two old rivals, which may increase Marriott's sense of urgency.
This atmosphere is quite similar to that of Hilton around 2015. In that year, Marriott won Starwood and became the No. 1 hotel group in the world1. It caused a lot of pressure on Hilton; Coupled with the setback in stock prices and the decline in ADR, Hilton desperately needs a win to revive its performance. Zheng Nanyan, then chairman of Plateno Hotel Group, also seized this opportunity and successfully introduced Hampton by Hilton to China.
Marriott's finding of Dehao does have a lot to do with our previous success ** Hampton by Hilton. Zheng Nanyan said, "Marriott recognizes this very well and often mentions it to me. Initially, he thought it might be a compliment from his American counterpart; But as the negotiations drew to a close, one of Marriott's core executives again brought up the case of Hampton by Hilton at a luncheon in Hong Kong.
Interestingly, Plateno's first partner was Marriott, but it didn't work out for various reasons. On the other hand, since the Plateno team and resources are already in place, the negotiations with Hilton immediately afterwards do not need to be prepared and hit the ground running. This "unintentional willow" type of opportunity paved the way for today's hand-in-hand between Marriott and Dehao, which unexpectedly paved the way.
Zheng Nanyan said frankly that although Hampton by Hilton's cooperation model was innovative, it also had some limitations. Around 2014, affected by the general environment of consumption upgrading and property rent**, China's economic hotels urgently needed to find new performance growth, so they launched a movement to upgrade to "mid-range hotels", and Hampton by Hilton was born in this tide of the times.
In Zheng Nanyan's view, the cooperation between Plateno and Hilton has not touched the core resources: Plateno's basic plan is a 7-day economy hotel, while Hilton takes the luxury hotel route, and the development direction of each other does not conflict. The two parties are working together on the basis of their respective strengths, which was the key to the success of the early cooperation between Plateno and Hilton.
As the "mid-range" movement continues, mid-to-high-end hotel brands continue to emerge, and the boundaries between local and international hotels are becoming more and more bordering – unlike in the past, the simplistic model of Hampton by Hilton no longer works as the market is fragmented.
Therefore, Zheng Nanyan did not choose to copy the previous "success model" this time. "Our partnership with Marriott started with a conversation about how to invest each other's core resources. Zheng Nanyan said.
This is completely different from the way Hampton by Hilton cooperated back then. A typical example is that Hampton by Hilton's first store in China opened in 2015, but it wasn't until early 2019 that Hampton by Hampton joined Hilton's Honors program (@闻旅报道).
Zheng Nanyan predicts that after the "demonstration" of Marriott and Dehao, the future cooperation in China's hotel industry may become deeper and deeper. After all, the world's hotel No1 has been left and has chosen a partner with rich experience in local hotel development and operation to share strategic resources - in this situation, it is difficult for other strong players at the table to sit on the sidelines.
Pictured: Marriott International's Best Choice brands.
How to break through
Open up the business imagination of high-end hotels
Dehao has also benefited a lot from the cooperation with Marriott.
At present, the competition pattern of China's local high-end hotel chain hotel market is still relatively fragmented. As of the end of 2022, the top 10 luxury hotel chain brands in China have a total of 694 stores, with a CR10 of 315%, of which the market share of Kaiyuan Mingdu is 44%；The top 10 high-end hotel chain brands in China have 1,979 stores, and the CR10 is 351%, of which the market share of New Century Mingting is 34%。
From this perspective, there is still a lot of room for growth for the two main hotel brands under Dehao. After joining hands with Marriott, Dehao has the opportunity to expand more business territory on the one hand, and on the other hand, it can also take the opportunity to quickly roll out the Patek Wood membership system.
It is understood that Baida Wood is a membership system launched by Dehao Group in 2022, which calculates membership points based on "length of stay", and no longer pays attention to how much money users spend in the hotel, but how much time users spend in the hotel. It is precisely based on this unique system that Patek can achieve the interconnection of rights and interests with Marriott Bonvoy, ensure that the points rules of the two platforms "do not fight", and truly realize the superposition of consumers' membership rights. (@财经网报道).
"On the one hand, time is equal for all, and if you're willing to spend more time in a hotel, you definitely like the experience; Second, the more time users spend in the hotel, the more consumption scenarios may be generated, and if we introduce more experiential products, we can create more growth beyond room revenue. Zheng Nanyan said.
This membership system also opens up the commercial imagination of high-end hotels. Zheng Nanyan told ChinaTravelDaily that the data results produced by the system are in line with the company's expectations, but it is a new way to play. With Marriott's cooperation, this new membership system will be better promoted and bring a real competitive advantage to Dehao.
With its rich experience in local hotel development and operation, Dehao can help Marriott expand its footprint in China, especially in second-, third- and fourth-tier cities. At the moment when the "** era" of real estate comes to an end, how to create benefits for owners with excellent operational capabilities is the core of high-end hotel brand competition. The gameplay has changed, and those who know the times are Junjie.
Standing at the beginning of 2024, China's hotel industry has ushered in a new era. On the one hand, the hotel supply side has made a great recovery: according to Yijing data, as of December 3, 2023, the number of hotels in the country is 6690,000, an increase of 44 from the beginning of the year2%。In terms of separation, the economy hotel has the fastest recovery because of the "small ship and good U-turn"; Mid-to-high-end and above hotels are recovering more slowly, but occupancy rates are recovering better.
On the other hand, after the ebb of revenge tourism in 2023, China's hotel industry is increasingly closely linked to economic fundamentals. Houhai data shows that in the first quarter of 2024, the prosperity index of the domestic hotel market continued to decline, and the prosperity index fell from 64 in the fourth quarter of 2023 to 9 in the first quarter of 2024.
In other words, China's hotel industry will also enter the stage of "rational prosperity" in the future, and the competition of major hotel groups for high-quality stock properties will inevitably slide to the cruel side of "deep water".
Perhaps, the real winner of the future of China's hotel industry will also be born from this competition.
Whether Dehao has this opportunity or not, everything will be left to time to test.