Curbing official spending leaves traditional hotels “out of favor”
Since the announcement of the Central Committee’s Eight-Point Regulation, high-spending behavior across the country has significantly decreased, and the turnover of most travel agencies, star-rated hotels, and high-end restaurants in Weihai has also been affected to varying degrees. Without the large clients of “group consumption” and “high-end spending,” traditional hotels have become one of the hardest-hit sectors experiencing a “cold spell” in performance after the crackdown on official spending.
While traditional hotels were busy trying to save themselves, chain vacation apartments quietly gained rapid popularity in Weihai’s accommodation market. Their performance not only remained unaffected by the “Eight-Point Regulation,” but even saw steady growth. This “going against the tide” in revenue not only established a path relying on market-regulated operations, but also opened up a new type of market, meeting the more refined service needs of consumer groups.
Although vacation apartments are still relatively unfamiliar to the Chinese public, their market is already very mature in Europe and America, accounting for 37% of the accommodation industry’s market share and generating annual sales of up to 80 billion US dollars, equivalent to about 600 billion RMB. Currently in China, vacation apartments as a travel accommodation option are still a new concept — many consumers have never even heard of them. The entire industry is in its initial stages, and the consumer market is still gradually being cultivated.
Regional advantages + talent mechanism
Recently, I visited the well-known Tujia Sweetome vacation apartments in Weihai. Wei Yuntao, General Manager for North China and the Yantai-Weihai region at Tujia Sweetome in Weihai, told me: “In terms of development across the country, Weihai’s vacation apartment sector is at the forefront. On one hand, the Shandong provincial government places great emphasis on tourism development — as early as 2012, it signed a strategic cooperation with Tujia called ‘Hospitality Shandong Goes to Tujia.’ On the other hand, Weihai’s tourism real estate has developed rapidly in recent years, with a large number of idle properties that can be revitalized through the Tujia model. Vacation apartments already have a very solid foundation in Weihai. Going forward, as the entire industry ecosystem becomes more complete, the market will gradually pick up.”
Whether for traditional hotels or new types of accommodations, “talent” is an unavoidable key issue. Tujia also has a relatively systematic approach when it comes to talent recruitment and training. According to Tujia officials, outstanding university graduates who join Tujia can start as assistant store managers or front desk staff, and as long as they perform well over a certain period, they can get promoted. Because Tujia apartments are expanding rapidly across the country, Tujia also continuously reserves a pool of excellent talent to serve as store managers and assistant managers in various locations. At the same time, Tujia has also established strategic partnerships with tourism vocational colleges in Shandong, setting up specialized Tujia classes to directly recruit professionally trained talent and ensure a steady talent pipeline.
Home-like experience VS traditional hotel experience
If traditional hotels only meet guests’ basic accommodation needs, then vacation apartments offer a more personalized lodging experience.
Wei Yuntao believes that compared to traditional hotels, vacation apartments offer better cost-performance, with prices generally about half that of five-star hotels in the same area. For customers, vacation apartments also provide more usable space. For the same price, where a traditional hotel might offer a standard room, a vacation apartment comes with a living room, bedroom, kitchen, and bathroom, greatly satisfying tourists’ desire for a home-like experience and personalized needs. Guests can do laundry, cook, integrate into the local life, and enjoy undisturbed stays.
Ms. Sun from the marketing department of Tujia Weihai also told me: “Compared to traditional hotels, vacation apartments offer much better privacy. Nowadays, most hotel rooms are separated by mere plywood, so you can hear your neighbors talking, which can affect rest. But in vacation apartments, with real solid walls, privacy is well protected, allowing guests to rest without disturbance — and that’s one of the main reasons many choose us.”
According to customer reviews currently tracked by Tujia, the average rating on Ctrip has reached 4.4, even higher than many five-star hotels. Meanwhile, over 96% of guests who have stayed at Tujia apartments go on to recommend them to family and friends. Wei Yuntao said most guests are very satisfied with the cost-performance of vacation apartments, and are pleasantly surprised by amenities such as kitchens, washing machines, and Wi-Fi.
New media marketing + word-of-mouth effect
According to internal data provided by Tujia, the primary sources of Tujia vacation apartments’ guests currently include those who book via the Tujia platform (including Tujia website and app), OTA (online travel platforms), offline contracted clients, and referrals from travel agencies — essentially achieving an organic combination of traditional marketing and e-commerce, truly connecting with the market.
At the same time, Tujia also evaluates its service quality through interaction with consumers. Li Shujun, manager of Tujia Sweetome Weihai, said: “We place great importance on every guest’s feedback. Through new media (Weibo and WeChat), we’ve increased communication frequency with our guests. Customer experience feedback helps us optimize service processes and improve service quality — and in fact, guests benefit from this too.”
As the year draws to a close, a series of regulations curbing official spending have been introduced, and the decline in food and beverage revenue has impacted the annual performance of most hotels in downtown Weihai. Speaking about the broader market environment, several Tujia executives stated: “It has little impact on us, and may even have a positive effect. Many civil servants traveling now pay more attention to saving money, so our more cost-effective vacation apartments are becoming more popular. While we can’t disclose specific figures, compared to last year, we’ve achieved a goal of doubling our turnover this year. We hope to work with our peers to grow the vacation rental industry into a genuinely people-benefiting emerging sector.”
Just as I was wrapping up the interview and preparing to leave, Ms. Sun received a call from a regular customer asking for help booking a Tujia property in Hainan. She immediately guided the customer over the phone to check sample room prices and layouts online, and quickly contacted her colleague in Hainan to secure the ideal room for the customer. She mentioned that there are many such familiar customers who have stayed before, and it’s precisely this sense of being at home no matter when or where that makes more and more customers favor them.