“2019 Report on the Development of China’s Tourism and Accommodation Industry” was Released in Beijing_China Tourism Academy
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“2019 Report on the Development of China’s Tourism and Accommodation Industry” was Released in Beijing

2020-9-2 10:52:49       Size:[L  M  S]

On Nov. 1, at the “2019 Asia Hotel Forum” held in Beijing, Dr. Yang Honghao, Director of the Institute of Industry Research of CTA, on behalf of the research group, released a report entitled “China's Tourism and Accommodation Industry: Focusing on High-quality Development”, and shared the main contents of the “2019 Report on the Development of China’s Tourism and Accommodation Industry”.

The report pointed out that high-quality development is not only the hope and exploration, but also a scientific and necessary way for the tourism and accommodation industry. There are seven parts in the report.

High-quality development is the necessary way

As an indispensable part of tourism economy and macro economy, accommodation industry is closely related to the development of the whole economy. In the past ten years, the investment growth rate of the accommodation industry is basically in line with the GDP growth rate, but just with larger fluctuation. Under the background that the economic development turns to the high-quality development, the accommodation industry, which satisfies the people's needs of beautifying their lives, is also moving towards high-quality development. Accommodation is faced with the imbalance between high growth rate and low profitability, significant regional differences in hotel performance, diversified but insufficient development, etc. High-quality development is required to solve the imbalance and insufficient development of accommodation industry, as well as to serve the national strategy.

Change the development momentum of the accommodation industry

In terms of innovation, attention should be paid to the spatial value of existing accommodation facilities. In particular, the efficiency of service and production should be improved via science and technology, especially the application of digital technologies such as 5G, blockchain technology, artificial intelligence, Internet of Things, big data, cloud computing, VR/AR, etc., as well as emerging technologies such as big health, modular construction, 3D printing and low-carbon environmental protection. With the rising cost of human resources, it is necessary to balance the application of artificial service and AI in the accommodation industry. The lower the level of hotels in the future, the higher the application degree of artificial intelligence will be; while the higher the level of the hotel, the more artificial application will exist. The accommodation industry will increasingly rely on digital technology to reconstruct new consumption scenarios and give rise to new forms of business, new models and new products. For example, driverless cars may become intelligent hotels, and customization of hotel rooms will become more and more common. The importance of cultural factors in the development of the accommodation industry is increasingly evident. On the one hand, cultural confidence promotes brand confidence and growth; on the other hand, cultural creativity enhances the added value of accommodation products and enrich consumer experience. Entrepreneurs, as risk bearers, opportunity discoverers and innovation practitioners, should be paid more attention regarding their value and role in industry development and innovation. “Innovation is the soul of entrepreneurship”. We should constantly advocate entrepreneurship in the industry, and all the employees including professional managers and corporate executives should possess entrepreneurship. In addition, capital promotion is still very important to the industry growth, so is talent improvement to the industry quality.

Upgraded consumption promotes high-quality development

Domestic tourists have become the main consumer group of China's accommodation industry. The expert and picky domestic tourists will force the hotel and accommodation enterprises to strive to meet the high-quality standards and product innovation, which will help them to win the international competitiveness. The characteristics of domestic demand play a particularly important role in shaping the characteristics of the accommodation products, as well as creating pressure for technological innovation and quality improvement. Consumers have been classified, and we need to pay attention to the “no hunger” “millennials” consumer groups, the consumption potential of the retirees, the rising of the middle-income groups and the shrunk consumer market. All these new consumption modes are promoting the emergence of new business forms, such as micro hotel, health hotel, culture and art hotel and parent-child hotel. Therefore, it is necessary to pay attention to the changes of domestic consumers’ needs and provide accommodation products that meet the needs.

Supply-side reform promotes high-quality development

Competition is an important drive for the development of high-quality accommodation industry. Besides the competition between local and international hotels as well as the domestic hotels, competition from new entrants is more significant, such as Tujia.com and other shared accommodation enterprises, OYO, H Hotel and other light chain. The new emerging hotels have completed the room scale just in a few years equal to decades of operation by traditional hotels, which is reshaping the competition pattern of the whole industry, and changing the traditional operation mode. Meanwhile, it can be observed that it is the "layman actions" of many hotels that break the habitual thinking and lead the development of new accommodation formats such as economy hotel, mid-end hotel, boutique hotel, shared accommodation and light chain hotel. Accommodation integration can promote the development of the industry. Jinjiang Hotel, Huazhu Hotel and BTG Homeinns grew up in the merger and integration, and Jinling Hotel Group and Rongtong Hotel Group expanded rapidly through transfer and restructuring. The integration of marginal and long-tail accommodation enterprises by shared accommodation and light chain mode has greatly improved the development quality of the accommodation industry. In addition, industrial convergence is also a drive for the development of the industry. For example, the integrated development of culture and tourism practiced by theme hotels such as Youxi, and boutique hotels such as Songzan Mountain Residence and Dongcheng Hotel Group, the integrated development of transportation and accommodation carried out by Spring Group and BTG Homeinns, as well as the integrated development of retail and accommodation implemented by Ikea and Muji. To further meet the needs of the consumption upgrades, accommodation products must constantly iterate. For example, Aoster, Jincheng, Yaduo, Vienna, All Seasons and other mid-end hotels optimize their core strength and then realize upgrade; Schotel, the Emperor and other boutique hotels have unique ingenuity and highlight their characteristics; Narada Hotel Group and other resorts advocate new lifestyles and create unique experiences. Boutique home stays promote cultural innovation and agglomeration/cluster development.

The high-quality development demands of enterprises in the accommodation industry chain

There is a close relationship between the accommodation industry and the related and supporting industries, and its development should not and cannot proceed alone, otherwise it will not be healthy and sustainable. Therefore, the development of relevant industries and market entities should be viewed from the perspective of the value chain of tourism industry and the system construction of accommodation industry. As for enterprises in the accommodation industry chain, the hotel brand owners take more care of the brand, strictly control the quality and increases the premium, pay more attention to product research and development and cultural integration, continuously implement hotel brand upgrading, and follows the national strategy for region selection, like the selection of Guangdong-Hong Kong-Macao Greater Bay Area by Shimao Hotel Group, as well as the selection of “One Belt And One Road” countries by Greenland Hotel Group. Home stay services are building efficient value chains and industrial clusters. Hotel owners have also begun to focus on quality. Broker OTA develops from fierce fighting to a dominant position, and then to the current oligopoly structure, restricting the industry innovation to some extent. To strengthen its position in the market, OTA once shut off OYO to avoid the possible impacts. BidRoom also hopes to win part of the market with zero commission. In the future, blockchain may be the most promising technology to restructure sales channels. In the field of hotel supplies, companies like the intelligent procurement platform are trying to create a new hotel procurement mode based on technology support, so that the suppliers can improve procurement efficiency and reduce procurement costs.

Service quality: do not given up good things though they may be minor matters

While talking about the innovation of the accommodation industry, it is important to realize that the service is fundamental, whether being “visible” or “invisible”, “perceptible” or “imperceptible”. Air quality, basicity of cloth oxalate, waste water emissions and other green environmental protection have become the lowest requirements of the accommodation industry. Service should be people-oriented, and convenience and considerate services should be provided, especially during the key contact points and critical moments. Should promote the spirit of ingenuity in the accommodation industry, enhance the service responsibility of employees, but also strive to address the concerns of employees.

The role of government in high-quality development

In terms of the supervision of the accommodation industry, there is an absence of administrative authorities to some extent. There are more than 100,000 accommodation agencies in China, and more broadly, there may be as many as 600,000. The culture and tourism department supervises over 10,000 star-rated hotels. However, once negative events occur in the accommodation industry, the media and the public focus on the culture and tourism department. In view of this, it is necessary to adjust the management system of the accommodation industry from the national level, formulate the classification standards and establish the statistical system, and also consider formulating a special plan for the development of the accommodation industry. In addition, a level playing field needs to be created. For example, local governments should remove discriminatory regulations against local brands when introducing hotel brands; cultivate diversified and innovative market players; optimize and revise standards for star-rated hotels and other standards, and strictly enforce industry regulations.

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