Two Key Words Of Hotel Investment In The Future: "Heavy Warehouse In China, Sinking Market"

"The era of national hotel brand has come, and its operation advantages are increasingly prominent in the sinking market." Tang Ming, vice president of Shimao Group, chairman and President of Shanghai Shimao Hotel Management Co., Ltd., and President of Shimao Xida hotel group, said.

On December 18, Tang Ming delivered a keynote speech entitled "investment and development opportunities for China's hotels under the new normal of" double cycle "at the 21st century accommodation Summit Forum (2020), sharing the views of a large number of hotel owners and management companies from a dual perspective.

Tang Ming said that the hotel investment in the future has two key words: "heavy warehouse in China, sink the market.". He believes that the threshold of investment in the first and second tier core cities will be raised, and the high-quality assets will continue to increase. At the same time, the third and fourth tier cities have a large market, representing new investment opportunities and consumption scenarios.

In his speech, Tang Ming said: "the third and fourth tier cities have a large market. Shimao Group also deepens local experience and international brands from four aspects of investment and financing supervision, so as to ensure the hotel investment income in the sinking market. As we all know, Shimao Group has established a joint venture with Starwood capital. We originally called it "Starwood". Later, we wanted to make it simpler and call it "Shimao Starwood Hotel Group". In the future, we have our own brand, and we will take the sinking market - the third and fourth tier cities as our development prospects. "

As for the layout of the first and second tier cities, he said, on the one hand, new hotels in first tier cities are limited. Basically, no new hotels will be built within the Fourth Ring Road in Beijing, nor will new hotel business licenses be approved. Shanghai's overall construction land is only reduced but not increased. The second aspect is that the cost of stock transformation is very high. The rent level of the first and second tier cities is much higher than that of the third and fourth tier cities. "Under such circumstances, the high-quality hotel assets in the first and second tier cities that have been opened now have great opportunities to maintain and increase value in the future, which is our judgment of hotel assets. Shimao Group is located in the core cities. We have 25 high asset hotels, 19 of which are international brands, and 6 are our own brands. Basically, more than 50% of them are in the core areas of the first and second tier cities, which are also landmark buildings. Together with international brands, we have built the moat of the brand and maintained the sustainable development of these hotels in the future. " Tang Ming said.

For the sinking market, hotel investment and profit Road, Tang Ming analysis, sinking market, "value depression" consumption power is very strong, the absolute value of disposable income and consumption expenditure of rural residents is not high, but the growth rate is higher than that of urban residents. Moreover, in the third and fourth tier cities, the pace of life is relatively slow, the cost of living is relatively low, and the pressure is relatively small. They have more time and energy to spend. Therefore, the promotion of consumption power in the third and fourth tier cities can not be ignored.

However, although the sinking market has become the main driving force for the future development of major hotel management companies, the road to profit is still difficult. Tang Ming believes that the three most important foundations for promoting the development of international hotel brands in China are "source of tourists, system and talents". In the sinking market, Chinese national brands and domestic hotel management companies have more room for development. Therefore, he called out "the era of national hotel brand has come".

He pointed out that in the past 20 or 30 years, the development of Chinese hotels has been mainly led by international brands and international management companies. So far, he feels that China has stepped into an era of brand opportunities for national hotels.

In the past development process, the advantages of international management companies in the source of customers, systems and talents are also the three most important bases for them to continuously promote their career development in China. "In the new era, we see the advantages in the sinking market. The brands of international management companies are getting weaker and weaker, but the opportunities for national brands are growing." Tang Ming said.

In terms of the source of tourists, the increasingly strong Chinese consumption power is showing. Now the proportion of domestic guests in each hotel percentage is increasing, and more than 95% of them may be domestic guests in the third and fourth tier cities. Under this premise, the business impact of the very strong international sales system and platform of international management companies on the hotel business, such as the third and fourth tier cities are very weak, and China's consumption power is weak Strengthen to bring more opportunities to national brands.

In addition, international management companies have developed advanced management systems and systems many years ago. In terms of management systems, after more than 20 years of development, international management companies have trained a large number of Chinese hotel managers and have learned from the perfect hotel management system of international management companies. On the contrary, China's leading technology has surpassed the international level in many aspects. In this regard, Tang Ming thinks that China Hotel Group has the possibility of overtaking on the curve, because our own technology has been leading.

The other is talent. Tang Ming said, "through training a large number of professional hotel management talents for China in the past 20 or 30 years, we have an international vision and understand the essence of international management company management. At the same time, we are Chinese. We are more grounded and understand the market. When the market changes, we can make changes faster."

Tang Ming also shared the diversified experience of Shimao's hotels in innovating product models and realizing hotel revenue. He pointed out that the innovation of hotel asset management operation and maintenance ideas is reflected in new channels, new scenes and new integration.