Haikou, China, Dec. 12, 2014 /PRNewswire/ -- Recently, with the successful signing of City Celebrity Hotels (China) Management Co., Ltd. to join the HNA Hotels Group “Hotel Alliance Program,” the program has surpassed 100 members. Among them are several high-quality domestic private hotel groups, including Wanda, Kaiyuan, Shuguang, Minshan, Banyan Tree, Yuanzhou, and Shuxiang Noble.
In 2013, China’s 11,687 star-rated hotels reported a collective net loss of 2.088 billion yuan. This marks another industry-wide loss following the downturn caused by the global financial crisis in 2009. Meanwhile, in 2013, the three OTAs—Ctrip, eLong, and Qunar—together earned 3.1503 billion yuan in hotel commission revenue. In comparison, the 11,367 star-rated hotels nationwide in 2012 posted a profit of 5.046 billion yuan, whereas in 2013, the 12,687 star-rated hotels in China suffered a net loss of 2.088 billion yuan. These three online travel agencies earned 923.6 million yuan in commissions in the first quarter of 2014, and in the second quarter, Ctrip alone collected 753 million yuan in hotel commissions, up 47% year-on-year and 15% quarter-on-quarter, with room bookings increasing 64% year-on-year. In contrast to the thriving OTAs, hotel profitability continues to shrink.
Against this backdrop, the HNA Hotels Group is striving to build an independent, civil, equal, open, service-oriented, and non-profit Chinese hotel alliance platform. Supported by various hotel groups and independent hotels, the platform aims to resolve the fundamental conflict affecting hotel profitability—the decline in profits due to OTA earnings and commissions. Upholding the principles of “non-profit” and “fairness,” the China Hotel Alliance Platform enables all hotels to conduct sales in a transparent, healthy, and equitable manner. It returns profits lost to OTAs back to the hotels themselves.
Within the industry, it is widely believed that direct sales and distribution currently represent the most significant factors influencing hotel membership development. With the advent of the internet era, frequent hotel guests often prefer the “one-stop” convenience offered by OTA hotel sales. These guests may opt to become OTA members rather than hotel members to access discounts. However, the establishment of a hotel alliance not only accommodates customers' diverse choices but also safeguards the development of hotel membership programs.
Compared to international hotel loyalty systems, mature membership systems among domestic hotel brands are few and far between, and there is a significant gap between domestic hotel loyalty programs and those of international brands. The root causes can largely be attributed to differences in brand support and membership management systems. Under the protection of the hotel alliance, breaking away from the old “going it alone” model allows hotels to gain access to a larger platform and more development resources.
In terms of membership, the establishment of the hotel alliance platform has created a high-quality hotel alliance system, enabling members of high-quality hotels to extend beyond their own properties. Leveraging the platform’s resources, whether members of the host hotel or alliance hotels, all can enjoy premium service guarantees within the platform. The flow of platform members fosters healthy and sustainable development across the entire hospitality industry. This is the original intention and vision behind the HNA Hotels Alliance Program.
Leisure members, hotel members, and alliance members now have more choices, ranging from resort hotels where one can “see the southern mountains in serene leisure” to high-end luxury city hotels “where city lights begin to glow.” These options cater to customers who seek higher-quality accommodation. It is expected that by 2015, over 1,600 upscale and luxury hotels will join the HNA Hotels Alliance Program, injecting vitality into the alliance and providing customers with more choices and superior services.