China Hotel Industry Market Monitoring Monthly Report, January, 2013

Many low-star-grade hotels take steps to new development ideas. The current feature or trend for star-grade hotels is concern of environmental protection and energy saving. The renewed lighting and material facilities will use energy saving and environmental friendly products; environmental protection new technology will be introduced into hardware transformation, such as replace the traditional kitchen stove and the steam cabinet by energy saving type, the lighting by LED lighting and the disposable washing articles by nonexpendable packing. Data shows that such measures will save more than 2 million Yuan per day. Among the hotels the low-star-grade hotel takes a certain proportion. Haikou tourism authorities advocate the construction of environmental protection hotel. Such policy will be a new chance and attempt to pioneer a new development path for hotels.

The average hotel booking price jumps up in January, 2012 comparing with that of last month. Among which the economy hotel increases most which is 8.54% and the five-star hotel comes next. January is the coldest month in winter, warm winter in southern China and snow in northern China are both popular for tourism. Hotel price in top ten favorite tourist cities change significantly especially for the economy hotel.

The average hotel booking price increases in January because of the two traditional festivals in this month—New Year and Spring Festival, especially the Spring Festival. Current these years, travel for Spring Festival is more and more popular. The increasing travel demand promotes the growth of hotel demand in tourist cities.

The average hotel booking price increases in top ten favorite tourist cities in January. For the growth of economy hotel Sanya region ranks first while for the five-star hotel Shanghai region ranks first. View from the distribution of top ten favorite tourist cities, target tourist cities still concentrate in southern warm winter and northern snow scene.

According to the tourist star-grade hotel re-evaluation from Beijing Municipal Commission of Tourism Development, there are 131 star-grade hotels which cannot reach the star-grade standard and be canceled. Among the 131 hotels number of five-star is 1, four-star is 12, three-star is 55, two-star is 56 and one-star is 7. Star-grade is canceled for many well-known hotels like Kingyu Wanhao Hotel, Longhu Hotspring Hotel, Beiyuan Hotel and Huandao Boya Hotel.

The low-star-grade hotel has faced unprecedented stress and challenge when the high-end brand hotel and economy hotel spring up like mushroom. It is beat in the re-evaluation. Main reasons for the star-grade cancel are: improper management, poor service, potential safety hazard, poor health quality and delayed facilities and equipment maintenance. Besides, part of the hotel-star-grade is canceled because of changing management nature and close for refurbishment.

View from overall recheck condition we can find four-star or above hotel with more advantages than low-star-grade hotel, that facilities and equipment maintenance, service and management quality as well as occupancy rate and average price are better. Overall management of three-star or above hotel is obviously better than that of one or two star grade hotel. The overall operation state of low-star-grade hotel develops slowly or even declines.

The information management and e-business marketing capability is weak for low-star hotel. The low-star hotel lacks of a unified platform to integrate resources and co-marketing while the economy hotel develops well. It is in dilemma in front of fierce competition.

As a matter of fact, hardware facilities of low-star-grade hotel are better than economy hotel. It will be better and easier for the low-star-grade hotel to transform and operate as economy hotel. The economy hotel simplifies the management of hardware facilities in order to save capital and human resource to improve hotel core service quality. It can be a reference for low-star-grade hotel. For example, the hotel lobby simply keeps clear, easy and bright, and the well-being facility and washhouse can be outsourced or removed. It will save much resource.

Presently, the low-star-grade hotel should pay a certain amount of time and cost to renew the facilities as it may loss the star-grade if the facilities cannot meet the requirement. However, for the low-star-grade hotel which business running is so-so it is stressful and maybe delayed to renew the facilities.

Market segmentation is important especially for the stressful low-star-grade hotels. Clear the market positioning and meet the market demand are necessary for the long-term development.

Many low-star-grade hotels take steps to new development ideas. The current feature or trend for star-grade hotels is concern of environmental protection and energy saving. The renewed lighting and material facilities will use energy saving and environmental friendly products; environmental protection new technology will be introduced into hardware transformation, such as replace the traditional kitchen stove and the steam cabinet by energy saving type, the lighting by LED lighting and the disposable washing articles by nonexpendable packing. Data shows that such measures will save more than 2 million Yuan per day. Among the hotels the low-star-grade hotel takes a certain proportion. Haikou tourism authorities advocate the construction of environmental protection hotel. Such policy will be a new chance and attempt to pioneer a new development path for hotels.

　　Qianzhan Business Information Co., Ltd. Industry Research Center

　　Research and Monitoring Team of Hotel Industry