ChinaTravelNews, Flymer Huang – OYU Hotel under Tongcheng-Elong was noted to have rolled out a franchise network earlier this April, and a significant number of hotels have been brought into the fold. Its name and the franchising model offering “free joining fee” resemble Indian-based OYO Hotels, ChinaTravelNews has observed.
But Mingliang Chai, Project Manager of OYU countered that the OYU trademark was registered by Elong as early as 2016. "The letters OYU refer to Outstanding, Youth, and Unique. The Chinese name is Wo Yu,” he said.
OYU started operations in April in five regions including Zhejiang, Guangdong and Sichuan. In June, it expanded nationally, introducing offerings to the capital cities in China. OYU now divides the national market into five regions – east, west, north, south and central China.
According to Mr. Chai, OYU will focus on acquiring independent budget hotels in second- and third-tier cities in the second half of 2019. It aims to have a total of 2,500 hotels by the end of this year. Mr. Chai believes there is still substantial room for growth in second- and third-tier cities with its efficient business development teams.
Franchisees operating under the OYU network are required to have over 40 hotel rooms. Fees on using its property management system, signboards and front desk logo renovation will be exempted, but OYU will collect a franchise management fee equivalent to 3% of the franchisees’ total revenue. The average room rates of OYU hotels range from 130 to 230 yuan (US$19-34) per night, Mr. Chai revealed.
On the other hand, Ctrip has also unveiled its hotel management brand Rezen Hotels Group last October, aiming to bring together top-rated hotels in China’s first- and second-tier cities, helping them improve performance and services with big data analysis backed by Ctrip. The launch of Rezen Hotels, Ctrip’s first high-end hotel brand, marks the beginning of the execution of the group’s strategy to branch out to the high star-rating hotel sector. (Translated by Elena)