China Hotel Case Study

Innovation in China’s Hospitality
1 Industry Background
The word “hotel” comes from the French language, which originally meant the villa built by the rich people to entertain important guests in the countryside. For the last 200 years, the definition of hotel has been evolving into something much more than a simple building: a world-class hotel is a comprehensive entertainment system that offers conformable and convenient guest rooms, various restaurants serving representative local foods, business conference rooms equipped with high-end communication devices, recreation centers specially designed for tourists, and other daily life & entertainment facilities, such as swimming pools, gyms, post office, banks, gift shops, beauty salons, and

According to the statistics of National Tourism Administration, up to the year of 2015, China had more than 21,000 hotels, more than 2.5 million guest rooms, and more than 3.6 million beds. Among them, there are 708 five-star hotels and 3298 four-star hotels. Most of the domestic hotel groups continued to realize large-scale development. Domestic hotel groups with more than 50 branches had increased to 24. International hotel groups that had entered the Chinese market include Shangri-La Hotel Group, the Starwood Hotels Group, and the British InterContinental Hotels Group, with over 20 thousand hotel rooms in China (Yang,

Their hotel brands cover almost all types of hotels, including holiday resorts, business conference, middle-grade business, economic, and so on;
(2) High-end brand hotel groups, such as the Kaiyuan Group, Hyatt Group, Marriott Group, Shangri-La Hotel Group, etc. Their hotel brands are mainly positioned in high-end five-star, four-star, and conduct business in luxury business, comprehensive conference, high-end vacation, and boutique theme hotels.
(3) Low-end hotel groups, such as Home Inn, GreenTree Inn, 7 days Inn, and so on. Their major projects focus on the three-star and economic hotels.
Although the national hotel market has been formed, the level of regional development is not even. Major high-end market are gathering in first-tier cities such as Beijing, Shanghai, Shenzhen, and Guangzhou, which also show very good operation performance. However, the second-tier cities are facing flattened growth in operation performance, and underdeveloped regions of China are mostly not able to attract high-end five-star hotels. Analysts said that the extremely uneven development in the hotel market is still a great problem facing underdeveloped regions (Yang,