To be a “lover of life’s aesthetics” — this is the brand proposition put forward by Jinjiang Metropolo Hotels. Nowadays, as the mid-range hotel market becomes increasingly vibrant, a wave of new brands is emerging. As another flagship offering following Jinjiang Hotels and Jinjiang Inn, the Jinjiang Metropolo brand not only carries high expectations from group management but is also proving its exceptional strength through action. Recently, a reporter from 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 on the mid-range hotel sector, and his analysis of limited service. The following is a detailed transcript of the interview —
Jinjiang Metropolo: Being a “Lover of Life’s Aesthetics”
Reporter: What brands does Jinjiang Metropolo currently operate under, and what are its 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 end, our top-tier brand is Jinjiang Metropolo, mainly targeting a market price range of 400-700 yuan. It is a limited-service mid-range hotel brand, but its properties do not fall under the four-star category.
The second is the more mainstream Jinjiang Inn brand, which is a mass-market lodging brand offering standardized economy hotel products. It emphasizes a high degree of hardware standardization and focuses on guests’ safety, health, and comfort.
The third is our Golden Guang Express brand, which is more casual and warm. Its hardware varies, providing different hotel experiences in different cities.
The last brand is Baishi Express, which has been on the market for seven years. The room size is kept at 8 square meters, targeting a broader group including college students and high-quality young professionals just entering the workforce. There are currently 100 stores.
At present, we have covered the high-, mid-, and low-end markets, but our main focus remains on developing the Jinjiang Inn brand. Over the next two years, we will prioritize expanding the Jinjiang Metropolo brand.
Reporter: Jinjiang Metropolo Hotels are divided into Classic Series and Business Series. What is the difference between the two?
Li Yukai: This relates to the nature of our properties. For the 300-500 yuan range, we call it the Business Edition, which can be quickly replicated. These hotels are built upon the commercial travel hotels we acquired last year, and there are currently 21 of them.
The other is the Classic Series, which mainly consists of hotels with cultural and historical significance, old buildings, or those in unique locations, with prices ranging between 500-700 yuan.
Hotel pricing is based on core locations. There are exceptions where some four- or five-star hotels in certain cities offer similar prices, but those are usually channel rates. For example, we have a hotel soon to open near the Bund, right beside the Peace Hotel and the Fairmont Peace Hotel. Our rate is half of their listed price, and we believe such a product will be very competitive.
Therefore, hotel pricing takes into account a comprehensive assessment of location and product quality, and one shouldn’t compare our regular room rates to the lowest prices of star-rated hotels.
Reporter: Jinjiang Metropolo Hotels have a strong design sense. What sets them apart from other boutique hotels?
Li Yukai: Our Jinjiang Metropolo Classic Series also features a kind of “light” artistry, along with a brand philosophy called “Lover of Life’s Aesthetics.” As the level of a hotel increases, people’s pursuit of spiritual needs grows higher, rather than simply seeking safety and comfort.
It is still different from design hotels, which primarily emphasize design elements and the creativity of designers. Such hotels are relatively difficult to replicate. These hotels need to integrate with the local urban culture while also satisfying consumers’ psychological desires. From this perspective, our Classic Series differs from them.
But at the same time, there are some commonalities. The consumption concepts and values they advocate are aligned. Just like luxury goods, it’s not just about a bag or its function of being carried. The higher the hotel tier, the more it needs to establish a humanistic connection and an emotional bond with consumers.
Limited Service: Being a “Market Disruptor”
Reporter: The service in mid-range hotels is referred to as limited service. What is your understanding of this?
Li Yukai: I think so-called personalization is also built upon a foundation of standardization. If hotel services aim to be personalized for every individual, it becomes difficult to match staffing levels. Clearly, limited-staff service is not personalized service.
For example: through our system, when operating a hotel, we prepare four pillows — two firm and two soft. In this case, we are providing a standardized product. Every room in the hotel will have four pillows, two soft and two firm. But when customers make a reservation, we let them choose which type of pillow they want, such as goose down, cassia seed, or oat husk. 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-like, limited form of personalization. Another example: we provide bathrobes in rooms, and these may include disposable partitioning devices. When a guest uses a bathrobe, we naturally replace it. If you hang it up without using it, I can keep it, but there is a clear identification mark. In this way, I offer many options to guests, but I don’t necessarily achieve this through person-to-person interaction.
Take our gym as another example. We place 100 towels and some mineral water bottles there. You need to swipe your card to enter the gym. This serves two purposes: one is identity verification, and the other is to build a database. We know the guest’s ID information and can track how long they use the gym during their stay. There is usually one staff member who doesn’t appear often, only showing up in the morning or afternoon. Their job is to replace the water and towels. These services are achieved through semi-self-service by guests.
Reporter: For Jinjiang’s core members, how do you think precise services should be provided 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 a peak at 35. If we look at mobile app users, the peak is at 25, and most of these users own high-end phones like Apple and Samsung. These two big data points among consumers can reflect the future direction of the brand.
Many consumers grow with the hotel brand and eventually choose to stay at higher-end hotels. But I believe a brand will always hope to attract more loyal followers. Hotels need fans. The membership system is actually a challenge — it requires customers to continuously earn points. Although communication with consumers may be infrequent, with only monthly bills or emails informing them of their points, this is actually the fan economy of the future.
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 the upgraded version 2.0 of the fan economy. It all depends on how the hotel industry plays it. A hotel without customers is frightening, and one without members is even more terrifying. In the future, a hotel without fans will be truly frightening.
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 you can’t accept the behavior of the next generation, it means you’ve gotten old. In any industry, we must maintain a learning mindset. Whether it’s employee education or child-rearing, the principles are the same. People in the hotel industry tend to 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 Class 10 building material that meets national standards, and the odor in person is minimal. Our food ingredients are also purchased from large supermarkets, which means there’s no gutter oil—this is something we can promise. Although we’ve invested heavily in operational costs for these improvements, consumers haven’t yet recognized this level of commitment. But I believe that through long-term brand development, the returns will come—it’s just that the market competition hasn’t reached that point yet. When it comes to service, this is what it’s all about!
Mid-range Hotels: Becoming a “Consumer Trendsetter”
Reporter: You once said that mid-range hotels are not lacking in quantity, but rather in brand presence.
Li Yukai: Yes, in terms of brand building, there is a gap—but it’s not simply a matter of categorizing existing hotels. Existing hotels must undergo drastic renovations, while also introducing new market-driven concepts, new sales channels, and rebuilding a mid-range hotel product that is suitable for consumers, has more cultural character, and an artistic feel.
Single-store development is not the mainstream. The entire market lacks the assets to develop this type of hotel, and the current stock of hotels is going through a process—a branding process—to build brands, establish connections with consumers, and develop a good membership system as well as centralized and direct distribution systems. However, in this process, some brands may not fit the market or have other issues, so mergers and acquisitions are also one way forward.
Hotel brand concentration will be quite high, but the business formats will be quite diverse, including high-end homestays. For instance, homestays have developed very well in Taiwan—they have a strong family-oriented feel and are unconventional. This could be a potential development direction for China in the future.
Reporter: How would you describe the current development stage of mid-range hotels in China?
Li Yukai: Any product goes through basic stages such as cultivation, development, maturity, and decline. I believe that mid-range hotels need to complete a process of consumer education. 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. Now, everyone has accepted it—guesthouses, inns, hotels, restaurants... Today, similarly, people find it hard to grasp the concept of mid-range hotels, and don’t understand 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 conferences and events but also offer banquet services—their services tend to be 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 comprehensive service categories, it inevitably leads to a waste of human resources in the hotel.
In my view, Chinese consumers have learned to make more rational choices. The core products of mid-range hotels are no less competitive than those of four- or five-star hotels. For example, the bedding at Jinjiang Metropolo, our WiFi speed, and even the size of the TVs are no different. The mid-range hotel products we promote are not part of the star-rating system, which allows us to set up self-service business areas and fitness areas in some hotels without including swimming pools. We aim to meet the needs of certain guests for self-service business and fitness—a hotel that reflects a certain lifestyle. Most of them are located in first- and second-tier areas of first-tier cities like Beijing, Shanghai, and Guangzhou, as well as provincial capitals, meeting both the needs of guests looking to upgrade from economy hotels and those tired of the standardized services of high-star hotels who want more options.
Reporter: Some predict that economy hotels will go through a major shakeout in the next 3 to 5 years. What’s your take on that?
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 increasing labor expenses. I think each brand is choosing ways to cope and will eventually resolve these issues. As things stand now, 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 rise, there will certainly be various brands choosing to upgrade or reinvent themselves to meet those needs. I believe mid-range hotels and economy hotels coexist—they are not substitutes.
Reporter: Industry insiders believe the future hotel market will become increasingly segmented. What’s your view?
Li Yukai: I agree with this view. I recently visited a small but beautiful hotel opened by a friend—it had a strong design aesthetic. Its investment wasn’t higher than that of an economy hotel, and it used a lot of technological applications, like WeChat door access, as well as new social media for promotion. I believe that in any segmented market, you can carve out a customer base that belongs to that niche. In the future, customer segmentation or brand segmentation will become a challenging topic for hotel management companies’ executives to focus on. Because customers will definitely become more segmented. But whether brands have enough capacity to cater to that depends on the capabilities of each hotel group.