To be a “life aesthete” – this is the brand proposition put forward by Jinjiang Metropolo Hotels. Nowadays, as the mid-range hotel market becomes increasingly bustling, a new wave of brands is emerging. As another major product following Jinjiang Hotels and Jinjiang Inn, the Jinjiang Metropolo brand carries great expectations from group management and is also proving its formidable strength through action. Recently, a reporter from www.meadin.com conducted an exclusive interview with Mr. Li Yukai, COO of Shanghai Jinjiang Metropolo Hotel Management Co., Ltd., to hear his emotional interpretation of Jinjiang Metropolo, his insights into the mid-range hotel sector, and his analysis of limited service. Below is the detailed interview transcript —
Jinjiang Metropolo: Being a “Life Aesthete”
Reporter: What brands does Jinjiang Metropolo currently have under its umbrella, and what are the future development plans?
Li Yukai: In October 2013, we established Shanghai Jinjiang Metropolo Hotel Management Co., Ltd., formerly known as Jinjiang Inn Hotel Co., Ltd. The purpose of setting up this company was to engage in multi-brand operations.
Starting from the highest to the lowest, our top-tier brand is Jinjiang Metropolo, which mainly targets a market price range of 400–700 yuan. It is a mid-range limited-service hotel brand, but it does not belong to the four-star hotel category.
The second is the more mainstream Jinjiang Inn brand, which is a mass-market accommodation brand, offering standardized economy hotel products with a high degree of hardware standardization, focusing on guests’ safety, health, and comfort.
The third is our Golden Guang Quick brand, which is more casual and warm. Its hardware varies, giving guests different hotel experiences in different cities.
The last brand is Baishi Quick, which has been launched for seven years now, with room sizes controlled at 8 square meters, targeting a broader group including university students and high-quality residential individuals who have just entered the workforce. There are now 100 stores.
Currently, we have covered the high, mid, and low-end markets, but our main focus remains on developing Jinjiang Inn. In the next two years, we will prioritize the development of the Jinjiang Metropolo brand.
Reporter: Jinjiang Metropolo Hotels are divided into Classic and Business series. What’s the difference between the two?
Li Yukai: This is related to our property conditions. For the 300–500 yuan range, we call it the Business version, which can be quickly replicated. These hotels are built on the foundation of business travel hotels that we acquired last year, and there are currently 21 of them.
The other is the Classic series hotels, which are mainly located in culturally historic buildings or occupy unique geographic locations, with prices ranging between 500–700 yuan.
Hotel pricing is based on core locations. It’s not ruled out that some four- or five-star hotels in certain cities sell at these prices, but that’s just the channel price. For example, we have a hotel about to open on the Bund, right next to the Peace Hotel and Fairmont Peace Hotel. Our price is half of their listed price, and we believe such a product will be very competitive.
Therefore, hotel room rates are determined comprehensively based on location and product, and we cannot compare our normal hotel rack rate with the lowest price of a star-rated hotel.
Reporter: Jinjiang Metropolo Hotels have a strong design sense. How do they differ from other boutique hotels?
Li Yukai: Our Jinjiang Metropolo Classic series also features a kind of “light” art, and we have a brand promotion concept called “Life Aesthete.” As the level of a hotel increases, people’s pursuit of spiritual needs becomes higher, rather than simply seeking safety and comfort.
It is still different from design hotels, which primarily emphasize design and the creativity of designers. Such hotels are quite difficult to replicate. These hotels must not only integrate with the local urban culture but also satisfy consumers’ psychological needs. From this perspective, our Classic series differs from them.
But at the same time, there are also some commonalities between the two. The advocated consumption concepts and values are consistent. Just like luxury goods, it’s not simply a bag, not just for carrying things. The higher the level of a hotel, the more it needs to establish a humanistic communication and a spiritual bond with consumers.
Limited Service: Being a “Market Disruptor”
Reporter: The service in mid-range hotels is referred to as limited service. What’s your understanding of that?
Li Yukai: I think so-called personalization is also based on a premise of standardization. If hotel service personalization is tailored to each individual, it becomes difficult for the hotel to match staffing levels. Limited staff means clearly it’s not personalized service.
For example: through our system, when operating a hotel, we prepare four pillows – two hard and two soft. In this case, we are providing a standardized product. Any room in the hotel will have four pillows, two soft and two hard. But when consumers make a reservation, we let them choose which type of pillow they want – for example, goose down, cassia seed, or oat. Isn’t that a form of personalized service? In a hotel, as long as there are ten to twenty different types available, it can offer guests multiple pillow options. In the process of personalized service, it’s actually a menu-style, limited personalization. Another example: we provide bathrobes in the rooms, and the bathrobes may have some disposable detachment mechanisms. When a guest uses a bathrobe, I naturally replace it. If you hang it there without using it, I can keep it, but there is a clear identification mark. In this way, I provide many alternative options to guests, but I don’t necessarily achieve this through person-to-person interaction.
Another example is our gym, where we place 100 towels and some mineral water. You need to swipe your card to enter the gym. This serves two purposes: one is identity recognition, and the other is database building. We know the guest’s ID information and also track how long they use the gym in the hotel. There is usually one service staff member who doesn’t often appear, but shows up during certain periods in the morning or afternoon. The purpose of their appearance is to replace the water and towels. These services are achieved through semi-self-service by the guests.
Reporter: For Jinjiang’s core members, how do you think precise services should be carried out in the future?
Li Yukai: Currently, the customer base of Jinjiang Inn is mainly concentrated around the age of 35, following a normal distribution, with the peak at 35. If we look at the mobile app, the peak is at 25, and the phones are mostly high-end models like Apple and Samsung. These two big data points from consumers can reflect the future direction of the brand.
Many consumers grow with the hotel brand and may choose to stay in higher-end hotels. But I think a brand will definitely want more attractors, and hotels need fans. The membership system is actually a challenge – it requires customers to continuously earn points. Although there isn’t much communication with consumers, the only monthly interactions might be bills or emails informing them of their points, but this is actually the future of fan economy.
Precise service, I think, can definitely be part of the transformation of the fan economy. Crowdfunding a hotel worth ten million, with a thousand people investing – that’s an upgraded version 2.0 of the fan economy. It’s just a matter of how the hotel industry plays it. A hotel without customers is terrifying, and a hotel without members is even more terrifying. In the future, a hotel without fans will be terrifying.
The fan economy is actually irrational. So, to grasp the future and capture the post-80s and post-90s customer base in China, you need to understand their thinking and meet their needs. When you feel that the behavior of the next generation is something you can’t accept, it means you’re already old. In any industry, we must maintain a learning mindset. Whether it’s employee education or children’s education, the principles are the same. People in the hotel industry are generally those who love life, and everyone can draw connections across fields. Furthermore, we must leverage the fan economy and internet thinking to build hotel brands.
Of course, hotels are meant to serve people at all times, and we must be a socially responsible enterprise. For example, Jinjiang Inn uses eco-friendly paint, a Grade 10 building material that meets national standards, and the odor you actually notice on-site is minimal. Even our food ingredients are purchased from large supermarkets, which means there’s no gutter oil—this is something we can promise. Although we’ve invested so much in operational costs for construction, consumers haven’t yet understood this aspect. But I believe that through long-term brand accumulation, we will definitely see returns; it’s just that the market competition hasn’t reached that stage yet. When it comes to service, this is what it’s all about!
Mid-range Hotels: Be a “Consumption Leader”
Reporter: You once said that mid-range hotels are not lacking in quantity, but rather in brand.
Li Yukai: Yes, in terms of brand building, this is a gap, but it’s not simply a matter of categorizing existing hotels. So, existing hotels must undergo drastic renovations, while also introducing new market-driven concepts, new sales channels, and recreating a mid-range hotel product that is suitable for consumers, has more cultural flair, and an artistic touch.
Single-store development is not the mainstream. The entire market lacks the assets to develop such hotels, and the existing stock of hotels is going through a process—branding process—to build a brand and establish connections with consumers, improve our membership system, and central distribution and direct sales systems. But in this process, some brands that don’t fit the market or for other reasons may be acquired or merged, which is also one way.
Hotel brand concentration will be very high, but the formats will be quite diverse, including high-end homestays. Homestays, for example, have developed very well in Taiwan. They have a strong family character and are unconventional. In the future, this is a potential development direction in China.
Reporter: How do you think China’s mid-range hotels have developed so far?
Li Yukai: Any product goes through several basic stages: cultivation, development, maturity, and decline. I believe that mid-range hotels need to complete a consumer education process. Fifteen or sixteen years ago, when Jinjiang Inn was developing economy hotels, we introduced a foreign concept. At that time, we called it Jinjiang Inn Hotel, and people didn’t understand—it’s just a guesthouse, they thought. But now everyone has accepted it: guesthouses, hotels, inns, restaurants… Today, similarly, it’s hard for people to understand the concept of mid-range hotels, and they also don’t know what limited service means.
In fact, mid-range hotels have not entered the traditional star-rating system. The three-star hotels currently existing in China not only host meetings and events but also banquet consumption—their services are broad and all-encompassing. However, according to statistics from the National Tourism Administration, this level of hotel is not very profitable. Because there are many service items and a wide range of service categories, it inevitably leads to a waste of hotel human resources.
In my view, Chinese consumers have learned to choose more rationally. The core products of mid-range hotels are no less than those of four- or five-star hotels. For example, the bedding at Jinjiang Metropolo, our wifi speed, and even the size of the TV—there’s no difference. The mid-range hotel products we’re promoting are not part of the star-rating system, which is why in some hotels we offer self-service business areas and fitness areas, but no swimming pools. This meets the needs of certain guests for self-service business and fitness, reflecting a lifestyle-oriented hotel. Most of them are located in first- and second-tier areas of first-tier cities like Beijing, Shanghai, Guangzhou, and provincial capitals, meeting both the needs of guests looking to upgrade from economy hotels and those tired of the standardized service of high-end hotels who want more options.
Reporter: Some predict that economy hotels will face a major shakeout in the next three to five years. What’s your take?
Li Yukai: The future development of economy hotels still has at least ten golden years ahead. Of course, it will face many challenges, such as rising property costs and labor costs. I think each brand is choosing its own response strategy, and these issues will eventually be resolved. At present, this segment is still the type of hotel most needed by China’s vast consumer base, whether for business trips or travel. China’s population has gone through an urbanization process, and people traveling for business purposes will continue to exist. But as consumer demands get higher, there will definitely be various brand choices for upgrades or reshaping to meet them. I think mid-range hotels and economy hotels coexist—they are not substitutes.
Reporter: Industry insiders believe the hotel market will become increasingly segmented in the future. What’s your view?
Li Yukai: I agree with this view. I just visited a small but beautiful hotel opened by a friend—it had a lot of design elements. Its investment wasn’t any higher than that of an economy hotel, and it used a lot of tech applications, such as WeChat door opening, and also employed many new social media promotions. I believe that in any segmented market, you can carve out a customer base that belongs to that market. In the future, whether it’s customer segmentation or brand segmentation, it will become a key topic for hotel management companies’ executives to discuss. Because customers will definitely be segmented. But whether brands have enough capacity—that depends on the capabilities of each hotel group.