I. Overview of the Economic-Type Hotel Industry Development in April
1. Hotel Brand Developments
(1) Recently, CityInn Hotel Group released its business development status for the first quarter of 2014. The development target completion rate for Q1 was 108%, representing an increase of 668% compared to the same period last year. Currently, the chain’s coverage spans 20 provinces and 90 cities across China, ranking seventh nationally in terms of regional hotel distribution. (Details)
(2) 7 Days Inn recently announced the official addition of two new brands: 7 Days Premium and 7 Days Select. Plans call for opening 100 and 200 stores respectively in 2014. Additionally, Plateno Hotel Group disclosed that 7 Days Inn aims to add over 550 new operating stores in 2014. (Details)
(3) According to Home Inns Group, the company plans to focus on renovating older properties over the next two to three years. Since the second half of 2013, nearly 70 old stores have been renovated, and around 100 more will be completed in 2014. (Details)
(4) Recently, GreenTree Inn opened its first nationwide Qingpishu Hotel at the southern foot of Mount Tai – in Tai’an, Shandong – marking another key step forward in the multi-brand strategy deployment of GreenTree Inn Hotel Management Group (hereinafter referred to as “GreenTree Inn”). (Details)
II. Voices from Industry Executives
(1) Recently, Sun Jian, CEO of Home Inns Group, revealed in an interview that the group is systematically renovating older stores, aiming to offer products that are more “vibrant, refreshing, and targeted.” He stated that 2014 would mark the beginning of a transformation for domestic economic-type hotels. Sun believes that as major economic-type hotel groups reach the scale of thousands of stores, corporate profits, brand building, and service management have become the main themes of development, with industry growth gradually slowing to between 15% and 20%. (Details)
(2) Recently, Zheng Nanyan, co-chairman and chief brand architect of Plateno Hotel Group — which owns multiple brands including 7 Days Inn — said that with increasing competition, rising rents and labor costs, the previously excessive profit margins in the economic-type hotel sector are no longer sustainable, making transformation imperative. Compared to the oversaturated luxury hotel market, the mid-range segment is better positioned to become the next growth area for economic-type hotel groups.
II. Analysis of Economic-Type Hotel Brand Influence in April
1. Top 20 Economic-Type Hotel Brand Rankings
(1) Changes in Brand Index
In April, Home Inns’ brand index was 129.83, a decrease of 13.19 from the previous month, representing a 9.22% drop. Detailed data shows that the search index rose slightly, while both the media index and operational index declined, with the operational index seeing the largest drop of 16.63 points, a 63.18% decrease. Meanwhile, the sentiment index remained relatively stable.
(2) Brand Analysis
According to Home Inns Group, it will focus on renovating its hotels over the next two to three years. Since the second half of 2013, nearly 70 old stores have been renovated, and approximately 100 more are planned for this year.
As the largest economy hotel chain in China and the first hotel group to go public, Home Inns Group achieved rapid development over the past decade and has entered a mature and stable phase of growth. However, facing profound changes in the domestic political and economic environment — similar to other large economy hotel chains — the group has encountered issues such as slowing growth, rising rents, increasing labor costs, and declining profits, all of which necessitate urgent transformation and upgrading.
Over the past two years, Home Inns has implemented a series of business strategies to achieve transformation and upgrading. In addition to the aforementioned renovation plan for old stores, the group recently updated its logo and revamped its official website in an effort to present a fresh image and better appeal to customers in second- and third-tier cities, signaling its intent to seek breakthroughs in those markets. Home Inns Express is also actively expanding upward, increasing the proportion of franchised stores, and implementing energy-saving renovations among other measures to address soaring costs and homogenized competition. Recently, Home Inns also signed a strategic framework cooperation agreement with Xulian De to develop green hotels.
The domestic political and economic environment has undergone — and will continue to undergo — profound changes, as will the hotel industry. Economy hotels can no longer rely on the same passive strategies that led to massive profits over the past decade. Only by accurately identifying market positioning, planning ahead, developing distinctive features and differentiation, improving customer experience, and strengthening core competitiveness can they maintain a competitive edge in an ever-changing market.
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