New generations trigger recovery

Fashionable, young and trendy customers on the hunt for special experiences

Strong consumer demand from the younger generations and a booming tourism sector have triggered a quick recovery of China's hotel industry - especially mid-level facilities that provide bespoke and special experiences.

"People born in the 1980s and 1990s have become major consumers in the industry; their economic conditions are on the rise and they are placing greater emphasis on having special experiences," said Ma Yingyao, founder of Sunmei Group, one of the leading tourist and hotel brand operators in China.

Ma was speaking at a hotel franchise expo in Guangzhou, Guangdong province, earlier this month.

He noted that the industry's traditional approach of providing a comfortable place for travelers to stay no longer satisfied the mainstream demands of customers.

"We are sharpening up our style and the format of our rooms to attract guests, and more importantly, we are bringing in the motif of lifestyle to our hotels," Ma added.

The Lano Hotel, a mid-end brand of Ma's Sunmei Group that targets business travelers, is creating an atmosphere that features British style, from room decor and furnishings to accessories and services.

Dossen Group, another major hotel management group in China, launched a new themed hotel in Beijing for movie fans in April.

Guests can enjoy their own private cinemas and participate in movie-themed parties, and have other related film industry experiences in the hotel.

According to the group, the new hotel is targeting short-term business travelers, fashionistas, creative professionals and middle-class families aged 20-40. It aims to open at least 300 such hotels around China in the next five years.

Cheng Xinhua, founder and president of Dossen Group, said his company would explore more business models that combine culture with hotels.

Besides movies, the group intends to test the hospitality market with hotels themed on music, cartoons, sports and games, he noted.

According to data from STR - a provider of global data benchmarking, analytics and marketplace insights for the hospitality industry - revenue per room of China's mid-end hotels experienced its fastest growth in 2016, up 5.7 percent on the year before.

That contrasted with growth in the luxury category, up 0.2 percent, while economy hotels reported 0.9 percent year-on-year growth.

The performance of China's mid-end hotels remained strong in 2017 as well as in the first quarter of 2018, as revenue per room rose 6.3 percent and 4.3 percent, respectively, from the year before.

More investment is also flowing into the sector.

According to a report by Yangcheng Evening News, investors are getting younger and are ready to make quick decisions.

One 30-year-old woman who did not want to be named said during the May expo that she plans to operate a hotel under the Xana franchise, a stylish mid-echelon hotel brand.

After getting information from Xana's stand and running it by friends, she signed up with the chain on the spot, the Guangzhou-based newspaper said.

"We've seen growing numbers of young investors who intend to operate a hotel with fine taste or with a niche style, rather than placing the emphasis on investment returns," the report cited a manager of the brand as saying.

Some industry insiders said the low risk in the industry partially explained why it attracts young investors.

"A second golden decade of China's hospitality industry is coming," Sunmei's Ma said. "The mid-end market is where local hotel companies will see fast expansion."

chenhong@chinadaily.com.cn

(China Daily 05/26/2018 page10)