Qingzhu, a hotel brand spun out of Meituan Dianping, has secured three financing rounds in the first half of the year and raised tens of millions of US dollars since its establishment in January 2019 from investors including Source Code Capital, XVC and Sequoia Capital China, according to a report in 36Kr.
Qingzhu integrates independent hotels by providing online and offline support to augment the hotels’ operation management services.
Mr. Nan Zhao, founder and CEO of Qingzhu, said it has signed a total of 2,000 hotels and aims to have a total of 4,000 by the end of this year. Franchisees have seen a significant increase in occupancy rate, RevPAR, ratings at OTAs and user reviews after a three-month period of cooperation with Qingzhu.
36Kr reports that Qingzhu’s business model is successful for the following reasons:
1. Changes in both industry layout and user needs
Industry data released in 2017 shows that chain hotels comprised just 19.08% or 3.2 million rooms in China’s hotel market that has a total of 16.77 million hotel rooms.
Since last year, the hospitality industry has been changing, as higher consumption for accommodation is prompting local and overseas hotel groups and even OTAs to vie for the 80% of the hotels that are still independent operations.
2. A management team with complementary capabilities
Qingzhu’s core team has deep experience in first-line operation and management of OTAs, e-commerce sales and hotel chains.
Mr. Zhao served as head of revenue and review management at Meituan Hotel, while co-founders Xiaodong Zhao and Fujin Liu were director of development and operation for East China with the Plateno Group and regional manager for offline marketing at Meituan Hotel respectively.
3. Operation Management Strategy
Franchisees operating under the Qingzhu brand are required to have their OTA ratings at certain standards. Snapshot statistics show that more than 80% of the 100 Qingzhu hotels in Chengdu have a rating above 4.5 on Meituan.
Qingzhu has also put an emphasis on facilities, user reviews and room size for independent hotels. It holds long-term contracts of at least three years with franchisees, and they are required to adopt the IT system provided by Qingzhu.
Qingzhu has a team of managers who are armed with standard operating procedure handbooks and management tools to function as regional hotel operation managers. Mr. Zhao expects every manger can manage dozens of hotels to double manpower efficiency in order to cope with regional management needs arising from rapid expansion.(Translatd by Elena)