Plateno Group is undertaking structural reorganization and brand integration to consolidate brand development rather than allowing brands to develop individually.
Sources said the group’s budget and brands such as 7Days Inn, 7Days Premium, IU Hotel and Pi Hotel will be grouped as the no-frill category, while the mid-range brands including James Joyce Coffetel, ZMax Hotels, Xana Hotelle, Lavande Hotels and Wowqu brands will be classified as innovative category, and the luxury Portofino Hotels and Resorts will be branded as quality lifestyle category. All sub-brands are assigned to a category but overseas brands, Hampton by Hilton and the Maison Albar, are its only hotel brands that are still uncategorized.
“Plateno Group is now looking for an opportunity to make an A share listing. It has added departments for strategic investment and financial operations,split up the large members department, formed independent online company regulation, set up a mega platform and will add a supply chain department,” the source said.
Ecole Hotelier de Lausanne’s chief China consultant Zifan Xia said: “The biggest advantage of classifying hotel brands is lowered cost and increased brand influence. This will help shift the public perception of Plateno Group as an economy hotel group and help boost Plateno Group’s market value, which will in turn help it gain financing,” she said.
Other than pubiic listing, she said the company can also expand its funding sources with its well-used tactics of capital circulation and injecting a large amount of disposable capital.
When Plateno Group was still 7Days Inn Group in Septembrer 2012, the group received a privatization bid from an investment group for US$635 million, a figure that Plateno Group's CEO Alex Zheng described as severely undervaluing the company’s share value.
On July 2013, 7Days Inn Group listed on the NYSE as Plateno Group and quickly developed a number of brands within a short period of time. However, China’s three major economy hotel groups - Plateno Group, Homeinns and China Lodgings Group - all went through a severe downturn.
Plateno Group accelerated its brand presence in 2014, expanding its 7Days Inn brand to 7Days Premium and 7Days Sunshine and opening the female--oriented Xana Hotelle, Maison Albar, Mora Coffee, Manjusaka Art Platform and Diaojia Hotel. It also took full control of marketing operations for Hampton by Hilton in China. Next, Plateno Group launched the smart hotel IU Hotel in February this year and the light luxury brand H12 in May.
Yet some industry observers are questioning the transition of China’s economy hotel groups. “There are plenty of problems with their management of personnel, products, development and operations. For instance Plateno Group developed a free loyalty membership club but whether it can upscale this system after adding a mid-range class will be a problem,” 9Ren Hotel Consulting’s Hua Wang said. He feels that economy hotels still need a 5-10 year transition period to enter the mid-range segment.
Mrs. Xia said: “I haven’t seen anything impressive yet out of the all the new brands Plateno Group has come out with these days. At the same time, newcomers like Atour Hotel and Narada Boutique Hotel are quickly closing the gap. The biggest challenge for economy hotel groups trying to transition to mid-range is making a truly original brand rather that just repackaging a tired concept.
Plateno Group and its partner hotels jointly opened a loyalty membership system and booking platform in August last year. The platform signed on 150 hotels, including 60 HKCTS hotels and 90 independent or small scale chain guesthouses by January 2015. At Plateno Group’s 10th anniversary ceremony in March, Mr. Zheng said the group’s goal for the next 10 years was to become the largest service company in the world.
Plateno Group now has 14 hotel brands and three international brands with close to 3,000 hotels in 300 cities in China serving over 80 million loyalty club members, according to its official website. It is also actively expanding into the SEA and European markets, and joined hands with China's top OTA to acquire China's second largest booking platform eLong on May 22 this year.(Translation by David)