China’s ride-hailing company Didi Chuxing has started to consider incubating new businesses and is currently exploring the hotel sector, according to Caijing.com.
Caijing.com cited two informed sources that the R-Lab (Rebuild Lab) of Didi originally set up to focus on food-delivery services has some of its senior executives assigned to experience and evaluate chain hotels and independent hotels.
R-Lab was set up in late 2017 to counter Meituan’s new car-sharing business. Its primary function is to explore and incubate products related to ground transportation.
About one-third of the original R-Lab team is now researching the hotel business, with another one-third remaining in customer service, marketing and design, and the rest in food delivery. The people in charge of examining the hotel idea have also been confirmed, according to a source.
The same source also revealed that Didi has confirmed its intention to enter the hotel area, but has yet formally established that as a project and set aside a budget for it. The project is still in a preliminary stage involving identifying various hotels’ customer profiles, propositions, locations and cost performance. No operation model and business plans have yet been worked out, and Didi has a long way to go before getting the ideas off the ground.
Some news reports in July and September involving Didi hinted at its ambition in the hotel business. On July 17, Booking Holdings announced it would invest USD 500 million in Didi, allowing Didi customers to book hotels through Booking.com or Agoda. On September 3, Times of India reported Indian budget hotel company OYO Hotels was in talks with Didi and co-working space operator WeWork to fund OYO’s business in China.
In response to inquiries about its expansion into hotel operation, Didi told Caijing.com that the company is working on a restructuring, and has no immediate plans to introduce new projects.