Film Hotel raises $16 million in funding to speed up budget hotel makeover
By integrating “films” and “hotels”, Film Hotel will create a new differentiated mid-scale hotel brand.
Film Hotel announced on April 11 that it had raised RMB 100 million (USD 15.91 million) in its A round of financing. The funding was led by IDG Capital and backed by Buhuo Ventures. The founding team also contributed more than RMB 30 million (USD 4.78 million) in the round.
Film Hotel’s founder Mr. Chao Jia was previously vice president of E Buy Hotel Chain, and has more than 10 years of experience in the hospitality industry. He said that the new capital would be used to expand its network of hotel properties, develop IT systems and recruit personnel.
In 2016, Film Hotel had secured 8 million yuan from Zhenshun Fund in an angel round of funding.
Film Hotel aims to differentiate its brand from other mid-range hotel chains through positioning its properties as a crossover of “Films + Hotels”. Essentially, its goal is to revamp economy hotels in the market by adding cultural and technological elements.
The hotels will be refurbished to resemble different movie settings. Hotel staff will put on movie costumes and the corridors will be turned into showcases of everything related to moves to immerse guests in an authentic cultural atmosphere.
Film Hotel currently has a dozen hotels in operation. The hotels have achieved an average occupancy rate of more than 95% and a higher volume of repeat customers than regular budget hotels. With the average room rate ranging between RMB 400-900, a single hotel grosses about RMB 10 million a year, at 40%-50% net profit margin. At this rate, each property will be paid back in around a year.
In 2018, Film Hotel plans to add 200 hotels to its network, of which 50 will be directly managed and 150 franchised.