Hua Live: We are not only platform

Controlling distribution has always been one of the top priorities of the hotel. In addition to negotiating with OTA and other online distributors, the hotel pays close attention to OTA's marketing campaigns, as these activities may adversely affect their pricing strategy.

The distribution sector in the Chinese market has never lacked a big bang, and seems to have a regular new play.

China Hotel Group (hereinafter referred to as "Hua-Live") recently signed a strategic cooperation agreement with Accor Hotel Group, which will focus on maintaining a strong distribution portfolio and "focus" on online direct sales.

"At present, direct sales accounted for 90% of our total bookings, about 10% of the night volume from OTA and offline agents." "Zhang, Chief financial officer and chief strategic officer of China, said. "We will focus on maintaining this distribution portfolio over the next five years as we expand in a wide range." ”

The growth plan is ambitious, as Zhang said, which means that China will become an important supplier of OTA. While Zhang did not comment on the impact of the growing hotel inventory on the financial structure of the transaction, she said that in the long run, the likely changes would depend on the "negotiations".

Wider network, stronger distribution control

"China has a huge market potential, and our strategy is to aggressively expand brand coverage." "Zhang said. The primary goal of the company is to expand the hotel network, introduce a number of hotel brands, and strengthen the franchise and proprietary hotel development.

If we are to evaluate the Chinese market, then the existing hotel group share is as follows: 2%, such as home 2.4%, Platinum Tao 2%, Jinjiang group 1.6%. China's housing report in the third quarter said it maintained the same market share. The entire hotel market includes one to five-star hotels, budget and mid-range hotel chains, and other single hotels or guest houses. The growth of the market share of China is still very large, the above mentioned hotel market scale of 110,000.

Our team focuses on strengthening the expansion of the economy and mid-range hotels, especially brands such as the new Accor brand, Novotel, Mercure, Ibis and Ibis Shang (the "MEB portfolio"). Through this cooperation, we have obtained the exclusive franchise rights of these brands in mainland China, Taiwan region and Mongolia. Thus, the economic hotel brands include Ibis, Ibis, Han court, Yee Lai, Hai friends, the mid-end hotel brand including the whole season, star, Nofuth. By the end of September 2014, there were 604 direct shops, 1237 management stores and 8 franchise stores in 282 cities in China.

Zhang said that in the next five years, the China-MEB Investment Portfolio opened 350-400 new hotels, that is, from the current 34% of the composite annual growth rate to 37%. "Our goal over the next five years is to reach 5000-6000 budget hotels and mid-range hotels." "she said.

Zhang is confident in establishing its own direct marketing network. One of the most important factors driving online Direct marketing is the customer's overall experience. "Now if a guest walks into our hotel, we can finish check-in in 30 seconds." Zhang promised. "Our guests can choose a room on the official website and mobile application, they can only scan the ID card to check in before they arrive at the hotel. ”

Towards digitization

Zhang said that China's current digital channels accounted for 40% of the total reservation, mobile phone booking is the main source of digital channel booking. In addition, call centers, door-to-door guests are still the main source of reservations. "We are constantly optimizing our website to provide our guests with standardized and transparent budget and mid-range hotel room information." "Zhang said. Watson is in the process of launching an investment plan on IT technology aimed at strengthening the digital strategy, focusing on new features for mobile apps and Web sites, but details of the plan are not yet available.

In fact, China's housing in the third quarter of the telephone earnings meeting mentioned Accor's total budget of 225 million euros, a five-year digital investment plan, and that China will develop its own digital investment strategy. The hotels are now investing heavily in IT equipment and data management to provide a relevant, situational experience for customers to travel. In addition, the hotel also reformed the equipment to ensure that operational decisions are driven by data analysis.

In addition to it investment, the tie-up between China and Accor will also bring some significant synergies, but it is not yet possible to disclose more details. For example, two hotels are paying attention to the upgrade of the user interface, thereby maximizing the amount of bookings using their CRS. The enlarged loyalty program will have 47 million members and the hotel will have more traffic. "We have started to prepare the English content of the hotel and will be displayed on Accor's English website." There are a lot of plans afoot, but it is not yet suitable to disclose. "Zhang said. Both hotels are looking for automated conversion initiatives related to loyalty programs to simplify the process of loyalty program members enjoying benefits. Members of the loyalty program will be given the right to use points to exchange for Accor hotel accommodation. This is also a work in progress, the specific features will be displayed on the site, loyalty program members will benefit from this. ”

Control distribution Channels

No hotel group has been spared some of OTA's marketing practices, which often have a negative impact on hotel brands. "The main OTA has invested heavily (or increased marketing spending) and they are starting to burn money," says Zhang. But we know it won't last forever. She added: "Ota offers coupons or rebates to attract bookings, which are driven by competition between OTA, but these measures cannot be sustained." For example, we have resisted the return of the present, as this will affect our pricing strategy. ”

Zhang is well aware that the direct marketing channel owned by the hotel Group is the channel for guests to obtain the lowest price. So what if Ota and some apps offer ultra-low-priced last-minute bookings on websites and apps? Zhang said that China will not participate in such activities, and said that China and the Chinese 10 OTA has a cooperative relationship.

In the six months since April 2014, the cost of marketing to live in China is about $15 million. In addition to investing in E-commerce, branding and loyalty programs, the company has invested heavily in IT services, paving the way for lower costs to join hotels. There is also an increasing focus on cloud based solutions, which are not explained in detail by Zhang. The hotel can further improve the client and back-end systems by providing new technologies to customers, such as providing a fresh payment solution in a multi-channel environment, or viewing Last-minute room inventory.

In addition to optimizing its brand's infrastructure, it plans to build a distribution platform that allows individual hotels and small chain hotels to benefit from the professionalism of large hotel groups.

"We are evaluating the role of service providers to help China's hotels in a number of areas, including distribution, IT services, loyalty programs and other related activities, so that the hotel will receive incremental revenue." "Zhang said. She says the platform is still in the development stage, but after the launch, all non-China hotel group's hotels have access to a trading platform. Doesn't that cause cannibalism? Not。 "Zhang said. She added: "Our main focus is on upscale hotels, and we are considering adding this type of hotel." Our core strengths will also be budget and mid-range hotels. ”

In terms of the role of the service provider, China will open a number of services, including basic technical facilities such as selecting the most appropriate distribution tools, broadband access, and hotel identity scan verification. Zhang said that the only thing China needs to do is to build a distribution platform for these hotel partners, but to help these hotel partners realize the global distribution and globalization of the customer's dream.