On March 19, East Group’s multi-brand investment roadshow was held at the Wuhan Wanda Wiestin Hotel. At the event, East Group announced a strategic partnership with Hankou Bank, the strongest city commercial bank in Hubei Province, and jointly launched a credit line of 200 million RMB with China Everbright Bank to support franchisees in Hubei, helping accelerate the development of East Group’s brands in the province. In addition to its existing premium economy brand, CityInn, the group is also actively promoting two new mid-range hotel brands—Yitel and Yisun—for franchising, aiming to offer Hubei guests more cost-effective accommodation options. Cheng Xinhua, Chairman and CEO of East Group, stated that the group is very optimistic about the development of Hubei’s tourism industry. With the wave of domestic consumption upgrading and the growth of the middle-class consumer group, there is significant potential for mid-range hotels in Hubei. Choosing Wuhan, the River City, for East Group’s first 2015 investment roadshow also demonstrates the strong appeal of the Wuhan market among key national cities for hotel brands.
East Group’s Brands Capture Attendees’ Attention
Consumption Upgrading: Select-Service Hotels Reshaping the Industry
After high-end and economy hotels have each experienced their own “golden eras,” mid-range hotels are now entering a golden period of development. An increasing number of consumers are placing greater emphasis on the quality of business and leisure travel, seeking refined accommodation experiences while still pursuing cost-effectiveness. Targeting this blue ocean market, East Group was the first in China to propose the concept of “select-service hotels” and establish it as a core strategy, aiming to fill a market gap while creating category standards in the mid-range segment through operations that embody the essence of select-service. Blending the elegance of high-end hotels with the efficiency of economy hotels—this is the core of select-service. By analyzing consumer needs and rethinking hotel spaces, service facilities, and styles from the inside out, the brand captures key pain points and earns market recognition.
Under the umbrella of the “select-service hotel” concept, East Group’s three brands segment the hotel market and meet diverse demands at different levels: CityInn is the pioneer brand of China’s premium economy hotel chain, shattering the stereotype of economy hotels being basic and crude among both consumers and franchisees; Yisun is the first standard mid-range hotel chain brand characterized by “light culture” in both products and services, while Yitel is the first mid-to-high-end hotel chain brand advocating a “light luxury lifestyle” ambiance.
In the newly launched mid-range brand Yisun Hotel, the “cross-boundary lobby” integrates the front desk, restaurant, bar, lounge, and business area, offering guests a versatile space that combines hotel services, leisure, business, socializing, and dining. Guests can enjoy a seamless blend of work and life here—sipping a drink, having a Western-style light meal, reading magazines or scrolling through social media on the sofa, all in a relaxed, stress-free “light living” atmosphere. The bathrooms in Yisun rooms feature separate shower and toilet cubicles, plus a half-step walk-in wardrobe. The smallest room size is 5–6 square meters, with nearly 2 square meters of activity space, meeting five-star hotel standards. Traditional separate leisure and business zones in hotel rooms have been integrated by designers. The flexible, interconnected space makes the entire room feel spacious and refreshing. Functional integration leads to spatial optimization, and spatial optimization enhances the hotel’s efficiency per square meter. It is reported that Yisun’s pricing in major developed cities ranges from 350–450 RMB, and in less-developed cities from 250–350 RMB, fully demonstrating the cost-effectiveness of select-service hotels.
Another mid-to-high-end hotel brand launched by East Group—Yitel—shows even more obvious advantages in cost-effectiveness. Yitel’s main selling points are “light luxury spaces, international dining, and stylish services.” The “light luxury space” is reflected in its spacious guest rooms that meet five-star standards, with room sizes exceeding 30 square meters, and bathrooms occupying over 20% of the space (6–8 square meters). For dining, Yitel employs international chefs and sources ingredients from international supplier Metro. Western cuisine is the highlight, complemented by local specialties for breakfast, which has received many positive reviews on Ctrip. The “stylish service” emphasizes refinement—Yitel introduces international concierge services and 7x24 one-touch service, where guests can access a variety of hotel services with a single button press, 24/7, 7 days a week. The first Yitel hotel in China, located in Wuhan’s Guanggu district, received positive market feedback upon its trial opening, achieving full occupancy in less than three months.
High-End vs. Down-to-Earth: Hubei to Become a Key Market for Mid-Range Hotels
As the hotel market in first-tier cities becomes increasingly saturated, second-tier cities have become both a target for high-end hotels and a battleground for mid-range hotel brands. According to statistics, from 2015 to 2017, nearly 10 high-end hotels will open in Wuhan, nearly doubling the number of new rooms. Following Chengdu, Wuhan has become another second-tier city where high-end hotels are competing to establish a presence.
According to senior figures in the hospitality industry, after the government introduced restrictions on “three public” consumption, the occupancy rates and room rates of high-end hotels in both first- and second-tier cities have declined to varying degrees. Whether Wuhan will have sufficient consumer capacity to sustain the high-end hotel market remains a question worth studying. Regarding Wuhan’s hotel landscape, Cheng Xinhua believes that compared to high-end, luxurious yet expensive hotels, select-service hotels combine “premium quality” with “affordable pricing,” making them more suitable for the cost-conscious middle-class consumer group. “The concept of select-service lies between full-service and limited-service. High-end hotels are full-service, emphasizing comprehensive offerings, but the resulting high costs are passed on to consumers—who often end up paying for services and facilities they don’t need.” Cheng Xinhua believes that hotel product development should focus costs where they matter most, crafting experiences that truly address consumer pain points, and delivering high-value stays at reasonable prices. This is the choice that truly aligns with the trends of mass consumer markets. Wuhan and Hubei represent the Central China market that no ambitious hotel brand can ignore or abandon. In the coming years, we’ll see which brands can gain a foothold here and reshape the mid-range hotel market.