Success factors for budget hotels What conditions must be met? let me tell you...

Success factors for budget hotels What conditions must be met? let me tell you...

Original: Li Sheng

Economy class hotel

This is basis of communication with consumers

Basic needs, simplified functions

Focus service functions on placement


Striving for excellence in core services

Functions for catering, shopping and entertainment are highly compressed

Simplify or even eliminate

Significant reduction in operating costs

Compression of helper functions

Mainly rely on advantages of hotel's location to make up for damage

Economy class hotel

As a rule, address is chosen in a less remote area

There are restaurants, shops, entertainment venues and other facilities in these areas


Defects in budget hotel compression helper functions

Success factors for budget hotels What conditions must be met? let me tell you...

Loan capital

Economy class hotel

This is a capital-intensive enterprise


Successfully funded NASDAQ listing

Successfully raised $109 million

Price/earnings ratio exceeds 100 times


Warburg Pinkus

Invest 10 million USD to participate in 7 Days Hotel

Jinjiang Inn hotels registered in Hong Kong

HKD 2.7 billion raised

Zhejiang Xinyu Star Change Flag

Wanhao Wanjia successfully hacked ST Qingfeng

The company is listed on Shanghai Stock Exchange

Motel continues to invest huge sums of money to accelerate Motel's expansion...

Economy class hotel

Only with capital wings

To rapidly dominate market and increase market share quickly

Success factors for budget hotels What conditions must be met? let me tell you...

Chain mode

Economy class hotel

Economical standout feature


Cost control is critical for hotels


This is a key success factor in cost control

Chain mode

Can allocate customer resources across different chain stores

Share management experience

Study abroad

The history of development of a budget hotel

Late 20th century

1/6 of total number of hotel rooms in world is 34

Hotel chain operation

Developed countries of Europe and America

More than half of hotels are chain hotels


Chinese budget hotel Home Inn

Jinjiang Inn, 7 Days, Hanting, Super 8 and other hotels

Everyone uses direct chaining

Franchise model

Higher income and faster growth

Success factors for budget hotels What conditions must be met? let me tell you...

M&A Topics


This is a watershed moment in budget hotel industry

Competition in industry is fierce and needs to be integrated

Industry leader

Mergers and acquisitions will be implemented for lagging behind in industry


The location factor is key to profitability of budget hotels

in industry

Competitors who will be better off through M&A

In bag


Achieving scalability

Of course, mergers and acquisitions will continue

In addition

Facing China's attractive industrial growth space

Foreign capital will also enter Chinese market

Active search for objects of attraction

American Hotel Association

There are statistics

Economy class hotel

Approximately 70% of US hotel market

But China

This ratio is less than 10%

Great business potential

Make a budget hotel in China

The lure of market is almost unparalleled

Success factors for budget hotels What conditions must be met? let me tell you...

Market segmentation

Currently internal

Homogeneity of services in budget hotels is a serious matter

For consumers

No additional divisions, fierce competition in industry

Leads to a decrease in profitability of industry

According to foreign development experience

There are three types of cheap hotels

Limited service hotel

Abbreviation: Limited Service Hotel

Economy class hotel

Abbreviation: economy/budget hotel

Cheap hotel

Abbreviation: Super Budget Hotel

Limited service hotel

Belongs to a high-end economy hotel

Middle class hotel

Cheap hotel

He belongs to lowest class

These three hotel levels

Prices vary a lot


The hardware gap is also very large

Limited service hotel room equipment

At least four or five star hotels

And some cheap hotels

Maximum simplification of equipment under guidance of cost reduction

Room amenities are relatively basic

The basis of this classification

It is actually based on purchasing power of consumers encountered

You meet clients who are traveling


Clients who travel often

Among tourists there are family travelers

Still a tourist student with insufficient income

Among business travelers

What is a short stay

What is period of stay


As a practitioner in our consulting industry

This is a client who stayed for a certain period of time

During project

We should all live where our clients are

Different consumers will have different consumption options

Too homogeneous competition

This will lead to a decrease in profitability of industry

Success factors for budget hotels What conditions must be met? let me tell you...

Improve control

Economy class hotel

It's only been a few years since I was born in China

For this newborn

Survival and development skills are still imperfect


Economy class hotels are about to be reshuffled

Hearing your core skills has become more important

Formation of economic strategy of hotel

Appropriate HR strategy

Financial strategy, marketing strategy, etc. needed

Promotion through management

Offer products that meet basic consumer needs

Target differentiation and enterprise value enhancement


If economy class hotel industry is experiencing a period of growth


The hotel will be as close as possible

Increase market share

An appropriate financial strategy should be aimed at raising capital

Cannot be a reliable financial strategy

Success factors for budget hotels What conditions must be met? let me tell you...

Information system

Like a hotel

Are services timely and considerate

To a large extent

Depends on use of information technology in hotel

Comprehensive booking system

Can guarantee more passenger traffic

Large Fixed Client Management

The system can guarantee normal occupancy

Reliable and stable logistics system

Hotel management system

This can guarantee buyer a "home" feeling

Let me tell you

Let's take Home Inns as an example, which has four main information systems platforms


CRS for central booking system

This is a customer relationship management system

CRM is a sales platform

It can

Management platform for business and cost analysis

Success factors for budget hotels What conditions must be met? let me tell you...


Central purchasing platform including logistics management

And an internal hotel management information system

Powered by these four platforms


You can use your PDA at any time

And understanding mobile phone

Business status of each Homeinns branch

For example, occupancy, product cost

Composition of clients, etc.

May also be from previous week

Previous month

Or longer time period data for chart analysis

Know situation in branch

Making judgments and decisions


Can monitor situation in each branch in real time

Home Inn management has gradually reached level

Real mixing

Reduced Average

Really do it

Cost control and responsiveness

Homeinn Monthly Orders

40% of which comes from a central reservation system

If there is no central reservation system

If these orders come from intermediaries

Home Inn will require a lot of profit

Simplify production chain

The result is cost savings


The lifeblood of a budget hotel is cost control.