In the past three quarters, the hotel industry ushered in the biggest rebound since the epidemic. On November 8, a reporter from Beijing Business Daily combed through the third-quarter results released by a number of hotel groups and found that these hotels all showed a U-shaped recovery trend in the quarter. Contrary to the sharp decline in performance in the first half of the year, many hotel revenues rose quarter-on-quarter during the quarter, losses also narrowed sharply, and many hotel groups even reported single-quarter profits. From the perspective of industry insiders, the comprehensive restart of inter-provincial tourism in the third quarter and the superposition of the summer tourist season have allowed the hotel industry to gradually get out of the “ghost” of the epidemic. The fourth quarter is expected to achieve a steady recovery in performance during the "11th" holiday and the further recovery of the business travel market. At the same time, it is worth noting that the accelerated expansion of various hotel groups has further intensified market competition.
Performance enters the rebound channel
In the third quarter, the hotel industry has entered a recovery channel. Up to now, BTG Home Inns and Jinjiang Hotel, among the three major domestic hotel groups, have all released their third-quarter financial reports. In terms of international hotel groups, major hotel chains such as Marriott and Hilton have also displayed their third-quarter transcripts. Both revenue and net profit increased compared to the previous quarter, and the business of international hotel groups in the Greater China region recovered significantly.
Specifically, according to the latest third-quarter financial report released by BTG Homeinns, the company achieved revenue of 1.672 billion yuan in the quarter. Although a year-on-year decrease of 25.36%, compared with the previous quarter’s revenue of 1.1 billion yuan, it increased by 52% from the previous quarter. In terms of net profit, BTG Homeinns also achieved its first single-quarter profit after the epidemic, reaching 140 million yuan, which is a significant recovery compared to the 160 million loss in the second quarter. A reporter from Beijing Business Daily also learned that, as the largest hotel group in China, Jinjiang’s third-quarter revenue was 2.91 billion yuan, an increase of 53% from the previous quarter’s 1.9 billion yuan. In addition, although Huazhu, one of the three major domestic hotel groups, has not released its third-quarter results, according to its latest third-quarter operating data, it is expected that its net income in the third quarter will increase by 0%-2% year-on-year. It can be seen that China Lodging Hotels Group has returned to the level of the same period last year and will even grow.
In addition to the substantial recovery in the performance of domestic hotel groups, the business of international hotel groups in Greater China is also showing a further recovery trend. According to the third-quarter financial report released by Marriott, the world's largest hotel group, the quarterly revenue of Marriott Hotel was 2.254 billion U.S. dollars, while last quarter’s operating income was only 1.464 billion U.S. dollars; in addition, the third-quarter revenue of Hilton, another international hotel group, was also quarter-on-quarter. A substantial increase, nearly 400 million US dollars higher than in the second quarter. At the same time, the financial reports of the two hotel groups also pointed out that the performance of their hotels in the Greater China region has recovered significantly. Among them, the occupancy rate of the Marriott Hotel in the Greater China region in the third quarter was about 61%, an improvement of 35 percentage points from the previous quarter.
Zhao Huanyan, Chief Knowledge Officer of Huamei Hotel Consulting, said that from the current third-quarter performance of various hotel groups, revenue has rebounded, but compared with previous years, there is still a certain gap. It is expected that the fourth quarter will gradually recover as business travel business And further recovery.
Contributions in peak travel season
Behind the impressive results of the hotel group in the third quarter are multiple factors.
From the perspective of the hotel itself, under the operating pressure in the first half of the year, “tricks” were frequently used in the third quarter. Specifically, in addition to room discounts and price reductions, some hotels have also launched many promotional activities. Taking Beijing hotels as an example, "recharge cash back" has become a "hot word" for many hotels. Many star-rated hotels including Beijing Sunrise Oriental Kempinski Hotel launched in July, August and September. There are fewer "recharge cashback" activities, among which the more powerful cash back amount can reach about 40%. In addition, many hotels had pre-sales in the previous May and June, and the actual volume of these pre-sale products was in the third quarter. At the same time, many tourists also had a lot of secondary consumption after purchasing pre-sale products. Brings an increase to the hotel operation. In the view of Gu Huimin, dean of the School of Tourism Science of Beijing International Studies University, in addition to the hotel’s self-rescue measures, changes in the external environment are also the main reason for the rebound in hotel performance.
“The third quarter is the peak tourist season. With the gradual recovery of inter-provincial travel and the increasing willingness of tourists to travel, the leisure vacation market has ushered in a wave of larger dividends. At the same time, the epidemic has also affected consumers’ travel habits. During the period when tourism has not yet recovered, surrounding tours, outings and even star hotel vacations have become the choice of many tourists, which further promoted the recovery of the hotel's performance in the third quarter." Gu Huimin said. At the same time, Zhao Huanyan also said that the third quarter is in the summer, and the proportion of parent-child outings has greatly increased. Many hotels have also launched some parent-child packages and preferential room types, and the proportion of family outings has also increased, becoming a major part of the performance recovery in the third quarter. Boost.
It is worth mentioning that the conference business that was temporarily "halted" due to the impact of the epidemic in the first half of the year recovered in the third quarter. However, many experts also bluntly said that external dividends are indeed critical, but hotels also need to create some distinctive highlights, pay attention to where their market segments are competitive, and maximize their strengths and avoid weaknesses to expand their attractiveness. At the same time, in addition to ensuring periodic turnover, it is also important to establish a hotel’s reputation.
The fourth quarter is expected to accelerate the recovery of blood
The recovery of hotel performance has also regained confidence in the industry. For the next four quarters, Zhao Huanyan analyzed and pointed out that in the next quarter, the hotel industry will also usher in the annual meeting of various companies at the end of the year. Facing these business opportunities, hotels that meet the requirements and have conference equipment will increase their marketing efforts. It is expected that the next quarter Further reduce losses. In Gu Huimin’s view, although the conference market was also affected by the epidemic in the first half of this year, and demand may decline compared with previous years, there was still a lot of offline conference demand in the first half of this year, plus the "11th" gold Week’s dividend, the hotel’s performance in the fourth quarter may recover further.
However, Zhao Huanyan also pointed out that at present, although there has been a recovery in the third quarter, winter is also the off-season for hotels. Whether some loss-making hotels can turn around depends on the hotel's promotional activities and its own attractiveness.
Not only that, the Beijing Business Daily reporter also noticed that while the performance of various hotel groups is recovering, the competition that accompanies "horse racing" is also intensifying. BTG Homeinn said that in September this year, the RevPAR (revenue per saleable room) level had returned to 90% of the same period last year, while still firmly pushing for the 800-1000 store opening plan throughout the year. As of the end of the third quarter, the number of BTG Homeinns new stores was 298, and there were 1084 contracted but not opened and under contract reserve projects, an increase of 300 from the end of the second quarter, a record high. China Lodging Hotels Group also disclosed in its third-quarter operating data that in the third quarter of this year, China Lodging opened 520 hotels, closed 201 hotels, and achieved a net increase of 319 hotels. In the first three quarters, Jin Jiang Hotels also added 603 hotels. According to industry insiders, although the revenue and net profit of major hotel groups are gradually picking up, the RevPAR and average occupancy rates of many hotels have not recovered, and some have only recovered 70% to 80%, and these data will directly affect hotels in the future Future performance. Zhao Huanyan believes that hotel groups usually obtain management fees and franchise fees from physical hotels, and the owners of specific hotels are the investors who bear the operating costs. Therefore, for hotel groups, the number of stores is “the more the better,” and the group will make decisions based on the relationship between supply and demand. In the next expansion strategy, how to control the quality of the hotel is also an issue that needs to be considered.
Gu Huimin said that overall, with the gradual recovery of the market, it is expected that there will be a "small upsurge" in demand in the fourth quarter, but whether it can return to last year's level in the fourth quarter remains to be seen. In short, compared with the first half of the year, the performance and operation of each hotel will gradually improve.
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