Exclusive Interview: Liang Zheng, Vice President of Operations at Lavande Hotel

Liang Zheng, Vice President of Operations at Lavande Hotel

Liang Zheng: Standing on the Shoulders of Giants to Build China’s Top Hotel Brand

　　(Meadin.com, Gu Wen) “Dedicated to creating a top domestic hotel brand that we can be proud of!” This is the inspiring vision of Liang Zheng, Vice President of Operations at Lavande Hotel.

　　Behind it is the powerful platform of Plateno Hotels Group. Liang Zheng describes Lavande as “standing on the shoulders of a giant, thus having a broader vision.” From the day it was born, it has had access to a platform with a 70 million-member system. Liang Zheng said, “When the five hotel brands under Plateno form a model of joint development and shared membership, this advantage will become even more evident.” It has a precisely calculated staff-to-room ratio—0.32. Liang Zheng stated that this is the balance point Lavande has found between staff-to-room ratio, revenue, and customer service experience.

　　It is none other than the brand-new, nature- and comfort-focused boutique mid-range hotel chain developed by Plateno Hotels Group—LAVANDE Lavande.

　　ItemsTrendNorth, South, Central: Full-Scale Expansion

　　Creating a situation where “a single spark can start a prairie fire”

　　“Lavande Hotel plans to achieve 60 signed contracts in 2014, with 25–30 openings, truly realizing a nationwide presence. Although the number of openings in each city may not be large, we aim to create a momentum where ‘a single spark can start a prairie fire.’”

　　— Liang Zheng

　　On July 17, 2013, Plateno Hotels Group announced its establishment and simultaneously launched four distinctive mid- to high-end brands: LAVANDE Lavande, Plateno Finno Portofino Hotel, U?し仁amesJoyce Coffetel, and ZMAX Hotel. In mid-August, Lavande entered the negotiation and contract-signing phase. By early 2014, the first Lavande Hotel branches in Zhuhai, Sanya, Beijing, and Xi'an were set to open. In just six months, from nothing to something, from negotiations to official openings, Lavande’s growth has been remarkably swift.

　　To date, Lavande has signed and is constructing 30 hotels, covering 20 cities nationwide. Locations include southern cities such as Zhuhai, Guangzhou, Nanning, Shenzhen, Sanya, and Shantou; northern cities like Beijing and Tianjin, Qingdao; central cities including Wuhan, Nanchang, Changsha, and Pingxiang; western cities such as Guizhou, Xi'an, Baoji, and Guangyuan; and eastern cities like Xuzhou and Wuxi. A strategic vision centered on first-tier provincial capital cities and radiating outward has essentially taken shape.

　　“Our target customers are primarily business travelers, which is why we have focused our strategic vision on first-tier provincial capital cities and some developed second-tier cities. These cities are hubs for business travelers, which gives us certain advantages, whether from a brand perspective or an operational standpoint.”

　　“Standing on the Shoulders of Giants”

　　Creating an Innovative Business Model

　　“Without the strong support of a platform like Plateno Hotels Group, trying to build a brand from scratch would present many unpredictable problems and challenges. There might be many twists and turns, and it definitely wouldn’t be possible to establish such a brand so quickly.”

　　— Liang Zheng

　　As is well known, Plateno Hotels Group announced the completion of its privatization acquisition of 7 Days Inn on the day of its establishment. The existing 70 million-member system platform originally owned by 7 Days will be a significant asset for the new Lavande. Starting in 2014, the integrated “Plateno Membership” program, which combines members from all five sub-brands under Plateno, will be officially launched. In the future, these five brands will adopt a model of joint development and shared membership to drive membership growth.

　　On the other hand, Plateno also provides Lavande with a strong system advantage. All of 7 Days’ systems are independently developed, such as the hotel management system, procurement system, reporting system, asset management system, membership system, and self-booking channel system... Moreover, these systems have been operating maturely for eight years, significantly reducing labor costs throughout the operational process.

　　However, in Liang Zheng’s view, for Lavande to grow big and strong and become a leader in the mid-range hotel chain market, in addition to relying on the strong support of the Plateno Group platform, it must also innovate further and establish its own business model. Thus, Lavande has introduced a series of creative business models such as the “General Manager Responsibility System,” the “Multiple Profit Point Model,” and the “0.32 Reasonable Staff-to-Room Ratio.”

　　“First, we have implemented the concept of the ‘General Manager Responsibility System.’ Store general managers who are recruited undergo training before being assigned to their locations, where they can exercise their initiative and enthusiasm within the overall framework.

　　Second, we will effectively leverage the ‘Multiple Profit Point Model.’ These ‘multiple profit points’ refer to various ways of generating revenue at every customer touchpoint once they enter the hotel, thereby increasing the average revenue per available room (RevPAR). RevPAR is the total output of the hotel divided by the number of available rooms. Since the number of rooms is fixed, we cannot rely solely on room revenue. Therefore, by attracting customers with these ‘multiple profit points,’ we can also boost overall revenue and improve return on investment.

　　So far, this concept has not been overly emphasized in the hotel industry, nor has it been elevated to a certain strategic level. However, during our early discussions with investors, we found that they are very interested in this ‘multiple profit point’ approach, which encourages us to better develop and utilize the ‘Multiple Profit Point Model.’

　　Additionally, one point that cannot be overlooked is the staff-to-room ratio. In existing economy hotel chains, this ratio is extremely low. As a mid-range hotel chain brand, we did not pursue an absolute low-cost staff-to-room ratio, because mid-range hotel chains must still prioritize customer experience and service—a service-oriented model.

　　Therefore, we have raised the staff-to-room ratio to 0.32, a reasonable figure derived through calculation. This achieves the simplicity and efficiency of an economy hotel while also ensuring customer satisfaction and delivering the service highlights and features that Lavande promotes. With these assured, we have found a balance point between staff-to-room ratio and profitability—0.32.”