Capital attack: strong OTA investment in large hotels, what impact will this have on structure of industry in future

Original: Li Sheng

15 meituan

Dongcheng 6

38 Journey

12 people in one trip

OTA22

Tongcheng-Elong Officially Announces Collaboration with Perlin Hotel Group (hereinafter referred to as "Perlin")

Signing a strategic investment agreement

Displays information about corporate search. Tongcheng Yilong COO

Wang Qiang, head of wine and tourism business group, is currently legal representative of Perlin Hotel Management Company

According to Jiemian News

Meituan invests in Dongcheng International Group (hereinafter referred to as "Dongcheng") with a 20% stake

Dongcheng International Group's valuation is about 5 billion yuan

Although Meituan and Dongcheng are still discussing investment

No comments

But Meituan is interested in investing in hotels

There are early signs

At November 2020 TravelNews Summit

Meituan Vice President Guo Qing once said

Meituan is considering investing in giant hotel chains.

If a hotel group needs

Meituan is willing to make some investments to help

But I'm not looking for more control. I don't know how to build my own hotel

It is not uncommon for hotel groups to use OTA

One of China's leading hotel groups

Huazhu, BTG Home Inns, Kaiyuan, Atour, etc. received investment from OTA

In reverse order

Except that original Plateno Group invested in eLong

There are very few cases where hotel groups have invested in OTA

Influenced by new corona epidemic

Analysis of practitioners of small and medium hotel groups

Small and medium hotel groups may face a dilemma

Either fight epidemic

Either hug hips of a large platform. And OTA still seizes opportunity to constantly look for investment opportunities in small and medium hotel groups

OTA loves to invest and create hotel groups

In future investment actions are possible

With Ctrip

OTA represented by Tongcheng-Elong is very interested in investing in hotel groups

Beyond investments

OTA seems to have another hobby - building their own hotels

Report on OTA's main investments in market and the established hotel group

As you can see from table above

Since 2016, OTA has been investing in hotels

More frequent steps to create hotel groups or create joint ventures with hotel groups

Before that

OTAs are generally still at stage of fighting each other

Perhaps it was fierce competition that made OTA more and more aware of importance of controlling resources

OTA investment in hotels is a common practice in industry

But for an investment hotel

I run a hotel "as both a judge and an athlete" that has been criticized in industry for a long time

At November 2020 TravelNews Summit

Jin Jiang Hotel (China)

Zhang Xiaoqiang, Chairman and CEO, and Sun Jian, General Manager of BTG Homeinns Hotel Group, came up with a metaphor for this.

Song Jian thinks OTA investing in hotels is like adopting someone else's child

Running a hotel on your own is like adopting a child after they've grown up and had another child

And I haven't done family planning yet, so I've had a few more. "What does this make an adopted child think?

Zhang Xiaoqiang compares each company to head of family

Brands are compared to children

The OTA Platform is Kindergarten

Suddenly, head teacher of kindergarten brought two children and gave him milk and cookies every day

The other children didn't. Then Jinjiang will build his own kindergarten and firmly engage in direct sales

Some industry insiders once said in an interview with TravelNews that reason why OTA wants to launch its own brand

Create a hotel management company

An important reason is resource monitoring for real-time room status information

However

After OTA invested in many hotel groups and opened its own hotel

It is inevitable to face how to allocate resources and how to integrate and collaborate with so many brands

Should internal technical system and team talents be linked or developed independently? If they want to be connected, how to do it?

In reverse order

Competitive pressure between hotel groups invested by same OTA is considerable

On example of Tongcheng Elong

In hotel group, she invests and builds herself

Perlin, Meihao, Meicheng and elong hotels cover middle and middle class hotels

Yi Meihao

The coverage areas of Meicheng and elong hotels also overlap, it's not hard to guess

There are also competing properties and franchisees with each other

Wang Qiang, COO of Tongcheng-Elong, expressed this

Is this internal incubation

Or a strategic investment management company

Behind this is Tongcheng Elong's optimism about long-term potential of China's hotel industry

AboutChina's Loud Hotel Market

It's also enough to allow more new players with internet genes to form a beneficial symbiosis through differentiated competition

For Tongcheng Elong

Investing in hotel management companies is one of measures aimed at concrete implementation of expansion of hotel chain

Development of production chain is one of main strategies of Tongcheng-Elong

Wang Qiang said: 2021

Tongcheng-Elong will continue to strengthen industry chain and help tourism industry improve its digital infrastructure

Zhu Zhe, a subsidiary of Tongcheng-Elong, has provided marketing tools such as cloud PMS and micro-booking for over 60,000 hotels

Tongyi Mall, invested by Tongcheng-Elong, provides professional one-stop supply chain services for tens of thousands of hotels around world

Recently, some insiders revealed

Including Tongcheng-Elong, many OTAs are looking for resources to invest in hotel groups in China

Some regional hotel groups have received many cooperation proposals from OTA and leading hotel groups

In future, integration of small and medium-sized groups may become commonplace

It is not easy for a regional group of hotels to go all over country

From perspective of a hotel group

Most importantly, what kind of help can you get from working with OTA

Dongcheng

The main brand is City Convenience, which is positioned as a premium economy class.

This is for Meituan, which is dominated by price-sensitive users

The tone of two is also quite consistent

In addition

Rapid development and technical capabilities of an Internet company

The talent system and even values ​​and culture

All this can become a breeding ground for traditional hotel companies

Cooperation between hotel groups and OTA can also give some discounts

I especially like Dongcheng

Perlin and other regional hotel groups, brand strength

Technical capabilities and internal organizational structure limit next phase of national expansion

For example

Dongcheng deals with Lianghu and Guangdong, while Polin is based in Central China

But if you go beyond your zone of advantage

Let's go to Beijing

Shanghai and other first-tier cities are covered, first, brand influence is not as good as Jinjiang, Huazhu and BTG.

We cannot ignore problem of weak IT technologies

However, hotel is facing a lack of talent to improve its technical capabilities

TravelNews reports

Dongcheng from 2019

Just started to strengthen investment in membership building

Spending a lot of money to find talent

Conquer Sun Feng, former ChAvu JD Travel, President of Dongcheng Shanghai Dongchenghui Platform Business Group

Shao Yuanjun, who led Huazhu Wireless Business Unit, served as Vice President of Dongchenghui Platform Business Group

As far as I know

Dongcheng has invested more than 200 million yuan in funds and strategic resources for membership system

However, for time being, both Dongchenghui and Huazhu will invest in technology

There is still a certain gap in terms of technical level, level of central booking or number of participants

The familiarization of organizational structure of regional hotel groups is also a difficult task

The head of regional hotel group in Guangdong province told

The hotel group I belong to is mostly made up of acquaintances and acquaintances forming small gangs with each other

Professional managers need to reform after joining, and getting approval and approval of board of directors is not so easy

Regional hotel groups need to overcome above hurdles

Violation of traditional model

It may be easier to move forward with capital than to move forward on your own

Also, there are people in industry who are wondering that after OTA invests in hotels, traffic will become biased in their favor

This is strictly against values ​​of platform

Lvyue, Licheng, etc. have also replied before and Ctrip didn't give them any traffic rejections

Besides holding OTA's thigh

Another option for small to medium hotel groups is to hug hotel group's hip

Or keep warm with other hotel brands

Last August

Founder of Baidawu Group

Ocean Link partner Zheng Nanian introduced himself

Baidawu is a platform for integrating Ocean Link into industry. Ocean Link will use power of capital to acquire more domestic and foreign hotel companies in early stages

However, it will not integrate brands that are too big, one or two hundred stores for a brand are enough

Mutual share ownership of hotels and OTAs and finally a joint transformation. Perhaps this is a general trend