In 2018, China’s hotel industry is expected to continue to expand, and the industry will gross some RMB 5 trillion (around USD 796 billion) in revenues from accommodation and F&B services, according to the 2018 Chinese Hotel Chain Development and Investment Report released by China Hospitality Association and Shanghai Inntie Hotel Management Consultants.
Among the Top 50 China Hotel Groups, Jinjiang International Hotels Group topped the list with 6,794 hotels and 680,000 rooms, while BTG Homeinns Hotels Group and HUAZHU Hotels Group are in the second and the third places with 384,743 and 379,675 rooms respectively.
In the Top 30 China Hotel Chain Brands list released at the same time, the top ten hotels include Homeinns Hotels Group, Hanting Hotel Group, 7Days Inn Group, GreenTree Inn, Jinjiang Inn, Vienna Hotels Group, Urban 118 Hotel, Thank You Hotel, CC Inn and Ji Hotel (All Seasons Hotel).
Budget hotels in need of transformation and upgrading
As of January 1, 2018, China had a total of 32,444 budget hotels providing 2,009,738 rooms, up by 9.95% year-on-year.
The report observed that the growth of economy hotels has slowed and the segment needs to be transformed and upgraded.
While there is a large inventory of economy hotels and they are in great supply in first- and second-tier cities after a period of rapid development, the RevPAR growth rate has been slowing down, and the ROI is lagging behind. Therefore, it is necessary for the sector to explore new channels and revamp business models by means of repositioning and focusing on segmented markets in first- and second-tier cities, upgrading products, extending the service chain by sharing hotel resources, and offering value-added services, according to the report.
Mid-scale hotel market with rising potentials
The category of midscale hotels, on the other hand, is growing robustly. As of January 1 this year, about 3,519 midscale hotels with 403,337 rooms (up by 31.43%) were in operation. McKinsey projected that the population of Chinese middle class will increase from 174 million in 2012 to 271 million by 2022, indicating that the number of potential midscale hotel consumers may increase at an annual growth rate of about 10%.
Mr. Ming Han, president of China Hospitality Association, believed that China’s hotel industry will continue to expand in 2018, and the industry will gross 5 trillion yuan from accommodation and catering. Catering alone will show sustained growth of 10% and contribute 4.4 trillion yuan.
On the other hand, new forms of accommodation are sprouting in the lodging sector, ranging from boutique hotels to green hotels, star-rated hotels, lifestyle hotels, B&B, family-themed apartment, nursing apartment, care apartment, RVs and others. The catering industry is expected to see breakthroughs in specialty catering, new retail, supply chain, brand incubation, hot items, low-carbon consumption, takeout delivery and continuation of heritage brands.