Low-cost service standardization is the key to inciting the industry.
The food, clothing and housing industry is the largest consumer market,There is a structural change in the “Breakfast Accommodation” involving hundreds of thousands of hotels in China – transformation Span>stock single hotel.
What is stock? If the “new retail” has transformed the existing street shops and the “innovative real estate” has transformed the old factories and shopping malls and scenic spots with rare customers, then the hotel industry is creating “new hotels”.
They don’t need to start from scratch, they only need to compile, brand “small business”, “not yet chained” small hotels; they do not have hundreds of thousands of franchise fees, can be quickly scaled, the store speed is traditional 40+ times the hotel to join. Behind this is the reengineering of products, traffic, and business models.
In the sinking market that traditional standard hotel chains can’t reach, the light chain hotel is sprinting and forming an industry blowout in a few months.
Among them, the valuation of OYO’s parent company has approached 10 billion US dollars. According to official data, OYO in China has integrated more than 10,000 hotels and more than 546,000 rooms in 22 months. The light residence was established for 8 months. Already got 3 rounds of financing; H Chain Hotel was born with a golden spoon. At the beginning of its establishment, it got a tens of millions of dollars of A-round financing from China Life and IDG Capital. It has been stationed in 200+ cities for 8 months and signed up for 1300. In many hotels, the number of active employees has increased from more than a dozen to 2,000, including 1,400 store managers.
A recent interview with Xia Qingning, founder and CEO of the H-hotel in the field of single-hotel hotel integration in China, this article will explain the changes and opportunities in the “single hotel” industry from the macro market to the specific business model. To explore local solutions in China:
· Why does the Chinese market need a chain of individual hotels?
· Can the “store manager mode” of heavy manpower become the key to the industry?
· Is there a lower cost, more efficient organizational management system and business model in the hospitality industry?
The following is an interview with Xia Qingning, founder and CEO of “H Chain Hotel”. Xia Qingning served as Vice President of Elong, responsible for accommodation business, and later established a long-term rental apartment platformSuddenly, in early 2019, the H chain hotel project was officially launched.
: Start a business again, why choose the direction of “renovating stock single hotel”?
Xia Qingning: I used to do accommodation business in eLong, mainly starting from the OTA traffic, but later found that the opportunity is still on the supply side. End sinking market research, China and overseas markets, we believe, China’s economic development and consumer demand, the market has come Forced industry has undergone structural changes in the timing, but also to the management Join the stage of transition to light chain.
Let’s look at a set of data. The left picture shows the number of hotel rooms at different price points and the corresponding GMV; the picture on the right shows the chain rate of hotels at different price points. This set of comparative data presents the contradiction between supply and demand in the Chinese hotel market – low-end hotels with a night price of less than $200 account for 73.5% of the total, but GMV is less than half of the entire hotel market. As you can see on the right, the chain rate of low- and mid-priced hotels is very low, less than 25%, and the chain rate in the US is 80%.
As far as the light chain model is concerned, in addition to high-end hotels, nearly 80% of the stock hotels in the lodging industry can be integrated, and the market size of this part is nearly one trillion.
Data Source: Data Capture, Huaxing Analysis
: Light chain and standard chain ratio, difference, advantage is reflected in?
Xia Qingning: Light chain and standard chain are different. We have no franchise fee, low management fee, low cost, width management, standard chain high franchise fee, high management fee, high cost and line management.
Traditional standard chain requires product standardization, service standardization, product standards to be placed at the door, stone lions, what must be in the room, price and service control. But their construction and management costs are high, and the county-level market can’t sink.
The key to the chain of individual hotels is to establish a hotel “service standardization”.
From the user’s point of view: the front desk has a strong sense of service and high efficiency in solving problems; the rooms are clean and tidy, and the breakfast is nutritious and hygienic, thus giving users a good and inexpensive living and safe and hygienic accommodation experience.
From the perspective of the hotel owner: standardize the front desk service, room standards, uniform linen washing, and establish a safe fire protection mechanism.
Only by improving the quality of individual hotels in essence, establishing a unified service standard, and chaining individual hotels, can increase hotel occupancy rate and increase sales revenue.
: Are you also starting to make a five-line sinking market? In the impression, your core market is in the second and third tier cities.
Xia Qingning: Yes, in fact, we have plans to do the sinking market, but we have advanced the plan. Our promotion path is to first become a provincial capital and then cover it from the provincial capital. The reason why I choose to do it now is because the sinking market is growing significantly from the occupancy rate, RevPAR and other data; and users in the sinking market need to live in inexpensive hotels. However, it has been difficult for the store manager to station in the past, and the low-line cities are too short of management talents.
: Why do you emphasize the “shop manager” setting? Is the store manager model the key to inciting the industry?
Xia Qingning: Chain management is inseparable from the store manager, who is the core of executive decision-making. With the store manager, service standardization can fall to the grassroots level, and the business data has real feedback. Especially when information and technology are not fully in place, many things depend on managers like store managers.
At present, 30% of the store’s store managers focus on store management and 70% on sales management.
After entering the store, the store’s first priority is to make the hotel clean. Do not look at this requirement is very basic, but long-term implementation is difficult, to have quality inspection, implementation standards, rely on the supervision and management of the store manager. We believe that quality inspection is the core of the chain industry. Can not blindly pursue SRN, dare to eliminate the cooperative shop that does not meet the requirements.
Secondly, it is room sales, combing channels and price management system, which is a comprehensive drainage for stores. For example, through light box advertising to attract walk in customers, optimize online OTA, contracted corporate customers and travel agencies, increase membership, increase occupancy rate and comprehensive income through price adjustment. we5,000 travel agencies have been co-operated, and 12,000 corporate customers have been added. The traffic source structure is also undergoing some changes. In the next 2 years, I hope that the proportion of online subscriptions for my own members will increase from the current 0 to 30%.
The manager’s salary, which accounts for 1/3 of our cost, although relatively high, in order to form an effective network and brand effect, help franchisees to integrate and integrate into H hotel chain The standardization system must do this at this stage. Of course, in the long run, we need a path to reduce costs and maintain large-scale operations.
Image from H-Chain Hotel
: The path to cost-effectiveness, found??
Xia Qingning: First of all, management is effective, from “one store and one long” to the main deputy store, and then to multiple stores. The current store manager’s recruitment is mainly external recruitment. There are more than 100,000 store managers with chain hotel work experience in the market, so the talent pool is enough.
In the future, we will have both external recruitment and internal mentoring. At present, we are doing a good job of looking at the manager’s recruitment work. How can the future challenges manage this part of the store manager at low cost?
We are also using intelligent system tools to reduce management difficulty and improve management efficiency. For example, online data tracking, the implementation can be photo upload breakfast, room inspection, and control of service nodes through user feedback. It is also possible to experiment with “no-one hotels” in areas with lower night prices.
: What is the level of the store manager in the organizational structure of the H hotel chain?
Xia Qingning: We are actually trying to build a “new hotel management organization system.”
Traditional standard companyThe lock is basically divided into five or six administrative levels. We did the subtraction. There are only two big chunks in the management latitude – the store manager team and other teams, all other teams exist in the form of empowerment groups, including breakfast group, OTA cooperation team, owner revenue share System team, etc., they empower the store manager, some must be empowered by the store manager, and more is the store manager who chooses the empowerment project according to the store situation. If the criteria for the establishment of these empowerment teams are not completed within a certain period of time, or if the store has insufficient demand for them, then the cancellation will be cancelled.
Above the store manager, the general manager of the city group, the general manager to determine how many stores in the region, the speed of the store, and the most commercially valuable areas, is the company’s partner. At the same time, we encourage the store manager to become the partner of the owner. If there is a surplus in the performance, there will be a small percentage directly to the store manager as a reward.
: What management systems are you using? What is the effect before and after use?
Xia Qingning:We have a management tool called “Feiyan System”, which is used by the assistant store manager to help the store manager and the owners to communicate more smoothly. The business management “Lucky Cat” system, room management data, business data are deposited in this system. In addition, the “CRS Central Reservation System” and the “Octopus Hub Platform” Lucky Cat PMS, CRS and membership system work together in the auxiliary hotel of the member management system headquarters. We are an iterative system that has been in China for more than ten years, so it was completely independent in four months and is also a high standard in the industry.
Although it is a light franchise, we force each store to install the system. Now the Lucky Cat (PMS) installation rate is over 55%, and it will be completely installed before the end of October this year.
: What is the final result? What is the incremental value that you bring to the owner after the cooperation?
Xia Qingning: The cost of our single room renovation is controlled within 1,000 yuan. This part of the investment can be recycled in about seven or eight months. The occupancy rate of the single hotel before the cooperation is basically around 60%, and now it is basically maintained at 70-75%, and RevRAP is increased by about 20%.
: Feel the gradual convergence of the competitions in the races and the convergence of the models. What are your advantages?
Xia Qingning:There will be different in the track, but in the end it will be the same. We believe that the chain of stocks of individual hotels is not a winner-take-all market, but the top three may take 80% of the market.
As for who can do it first, it depends on who can standardize the service at the lowest cost. If the standardization of services has not yet been achieved, the expansion and accumulation of members will be catastrophic.
H The uniqueness of the hotel chain in the industry is reflected in three points.
One, the store manager mode, emphasizes service standardization. The second is the management capabilities and efficiency improvements brought by intelligent management tools. These two points have been discussed in detail before.
The third, H hotel chain has local hotel management experience. The China Living Group (NASDAQ: HTHT) was involved at the beginning of our founding and provided financial and resource support. In January 2019, H Hotels completed a tens of millions of dollars of Series A financing from China Life and IDG Capital, and the H chain hotel’s PMS system, central reservation system and membership system were able to be quickly built up and related to China Life’s unreserved support.
: What business innovations will advance?
Xia Qingning:H Chain Hotel will do a global hotel chain service, so it will continue to expand upwards and downwards.
The best example is to provide “cheaper accommodation options” in the first-tier citiesunmanned hotels; and “slightly high-end integrated service hotels”, such as Catering hotels will rely on 400-800 yuan for this stall.
At the same time, we will do multi-dimensional empowerment beyond service standardization, such as financial empowerment, supply chain empowerment, etc.. At present, the occupancy rate of the old hotel is not high. In essence, the hotel infrastructure is in need of an iterative update, but the small and medium-sized owners have no money/not dare to invest and transform. Now through our data accumulation, risk control model, we can measure what type of hotel, how much output can be produced, etc., we can invest together with the owner. These can help us do more things in the enabling industry.
The cooperation between us and the owners also needs to be refined. Now it is still a simple model, all the owners’ joining fees and management fees.It is unified, The future will be stratified according to the store situation, sub-program cooperation, we are improving the program, will ensure the industry’s lowest rate.
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Note: I am Mo Xiaoli, who is concerned about the new things in the entertainment and consumption fields. I can exchange the WeChat Spontaneous-Literary. Please pay attention to the name, company and position.