Seeking New Growth Drivers Amid Perseverance and Transformation: The 21st Century Accommodation Industry Summit (2021) Held in Shanghai

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2021 is the first year of China’s 14th Five-Year Plan. With international tourism still on hold and a domestic tourism-led market now firmly in place, the pent-up high-end demand from outbound travellers overlapping with the gradual release of quality-oriented mass-market demand has made this the year for China’s tourism industry to fully tap its endogenic power.

Affected by repeated pandemic outbreaks, the tourism accommodation sector started high but declined, hot and cold. Particularly since the second half of the year, sporadic outbreaks have continued to appear across the country, adding uncertainty to the recovery. Against this backdrop, how will the competitive landscape and investment logic of the domestic accommodation industry evolve? Can the branding, smart technology and quality improvement paths of the accommodation sector unearth new drivers to guide sustainable growth in the future?

On 14 December, the 21st Century Accommodation Industry Summit (2021), hosted by the 21st Century Business Herald, took place in Shanghai. Themed “Perseverance and Transformation: Seeking New Drivers”, the summit focused on how the domestic accommodation industry embraces the new normal and explores new development approaches in the post-pandemic era.

Deng Honghui, Deputy Editor-in-Chief of Nanfang Finance and Economics Omnimedia Group and Editor-in-Chief of the 21st Century Newspaper Group

Speaking at the forum, Deng Honghui, Deputy Editor-in-Chief of Nanfang Finance and Economics Omnimedia Group and Editor-in-Chief of the 21st Century Newspaper Group, noted that while many tourism practitioners felt this year’s operations were harder than last year’s, the accommodation industry was still resiliently recovering through constant adaptation. The pandemic has changed people’s needs and forced the industry to evolve; the tourism accommodation sector must offer more diverse categories to serve a changing market.

Seeking Change Amidst Change

As the opening year of the 14th Five-Year Plan, 2021 has been another year of pandemic normalisation for the domestic accommodation industry. According to statistics released by the Ministry of Culture and Tourism, the total number of domestic tourist trips in the first three quarters reached 2.689 billion, recovering to 58.5% of the same period in 2019. Domestic tourism spending totalled 2.37 trillion yuan, recovering to 54.4% of the 2019 level.

Despite repeated outbreaks this year, the domestic accommodation industry has been doggedly seeking change in the face of uncertainty.

Yang Honghao, Director of the Industry Research Institute of the China Tourism Academy, pointed out at the forum that China’s construction of a “dual circulation” economic development pattern has far-reaching implications for the accommodation industry. Not only have demand-side factors, tourist consumption preferences and habits changed, but the industry structure has also shifted, with a stronger head effect.

Based on the current environment and changes in the hotel industry, Yang made several judgments about the strategic layout of the sector. First, the dual-circulation economic pattern is centred on domestic circulation, so the focus of China’s accommodation market will shift towards domestic demand. After this market structure and focus shift, innovation in accommodation formats is necessary. Second, as the development model transforms, the focus of the hotel industry will return to the core of hotel operations and management. Third, the hotel industry must actively fulfil its social responsibilities, both internally and externally. Fourth, regarding market penetration and internationalisation, on the one hand hotels need to go deeper – down to third- and fourth-tier cities, even fifth-tier cities and communities; on the other hand, international development must continue, with brands going abroad.

Zhang Xiaoqiang, Vice President of JinJiang International Group, Chairman of JinJiang Hotels and Chairman of JinJiang Hotels China Region

Zhang Xiaoqiang, Vice President of JinJiang International Group, Chairman of JinJiang Hotels and Chairman of JinJiang Hotels China Region, shared insights under the theme “Finding New Drivers – JinJiang’s Innovation-Driven Practice” on the necessity for hotel companies to drive development through innovation in an uncertain environment. He mentioned that this year marks the 20th anniversary of China’s entry into the WTO. Without the pandemic, these two decades would have seen foreign-invested, privately-owned and state-owned hotel enterprises all thriving.

But the pandemic changed the status quo, plunging the hotel industry into violent turbulence. “We face not only declining profits and peril, but also a lack of growth momentum and innovation,” Zhang remarked. He described the previous 20 years as having pressed the fast-forward button on the hotel industry’s horse-racing-style rapid expansion, but the pandemic pressed the slow-motion button – even a pause button – though difficult, this is the reality.

Yet on the other hand, Zhang also noted that the pandemic is prompting the hotel industry to rethink, as past models, experiences, operations and products truly cannot meet new consumption demands. Seeking growth in uncertainty is not easy, and JinJiang’s answer is “innovation”.

Sun Jian, General Manager of BTG HOMEINNS Hotels Group

As a veteran practitioner in China’s hotel industry, Sun Jian, General Manager of BTG HOMEINNS Hotels Group, shared the domestic hotel industry’s transformation path in the second half of the post-pandemic era. In his view, exploring transformation is the next bellwether for the sector. In the first half, hotel groups won their competitive position by pursuing speed and scale – being “fast and big”. But in the transformation battle of the second half, the industry needs to shift towards a professional, refined approach – doing “specialised and fine” work.

In this regard, Sun believes that in this transformation, the hotel industry should start from an innovative perspective and focus on four aspects: models, products, spaces and users.

Qian Jiannong, Chairman and CEO of Fosun Tourism Group

In the impression of Qian Jiannong, Chairman and CEO of Fosun Tourism Group, the emergence of economy and business hotels is continuously enriching the supply-side categories. However, supply in the resort category still falls short of demand. Qian noted that Fosun Tourism’s choice to focus on the resort segment when deploying into accommodation is closely related to the overall environment of China’s accommodation industry. “First, structural adjustment: China’s accommodation sector, whether in a single format or its own format, will definitely phase out poor production capacity; this challenge is long-term. Second, consumption recovery: just how the consumer market will recover and what the consumption trends will be during that recovery – these pose major challenges for our future accommodation industry development.”

Qian said that as tourism industries in various countries gradually enter a recovery trajectory – with China in a leading position in the recovery process – the overall tourism sector still holds enormous prospects. Especially for accommodation, consumption upgrading and changes in hierarchies are catalysing the sector’s diversified development.

Despite repeated pandemic flare-ups, China’s accommodation industry recovery is at the forefront globally. In the post-pandemic Chinese accommodation market, even leading international hotel companies are sparing no effort in seeking anchor points for future growth.

Qian Jin, Area President of Hilton Greater China and Mongolia

Qian Jin, Area President of Hilton Greater China and Mongolia, said, “People often say ‘the only constant is change itself’. What is predictable is that under the dividend of national policies and as we move into the post-pandemic era aiming for normalisation, understanding the market, risk resilience and talent development are basic requirements for international hotel groups developing in China, and will also be the window through which China showcases its services to the world. Living in a new era, I am full of expectations for the future of the hotel industry. I believe everyone, like me, has their own goals and determination to embrace new opportunities and new challenges together.”

Qian Jin added that international hotel groups must closely connect with Chinese consumers to achieve long-term development, and should always maintain high sensitivity towards the Chinese market and Chinese consumers to advance steadily at high speed on the right track.

Seeking New Growth Drivers Together

This year, as domestic outbreaks recurred locally, what the accommodation industry faced was not normal operations but the normalisation of the pandemic.

Liu Yaning, Director and Vice President of Diaoyutai MGM Group, firmly expressed confidence in the domestic hotel industry’s development prospects: “First, although the pandemic is severe, it will not shake the fundamentals of China’s high-end hotels. Second, China’s hotel industry, especially the high-end segment, needs to ‘break the circle’.”

In fact, riding on the pandemic, the demand structure of China’s hotel sector is also transforming. Chinese travellers unable to holiday abroad in the short term have turned to the domestic market, giving China’s luxury hotel sector a new driving force amid the pandemic. On the “circle-breaking” path for mid-to-high-end hotels, Liu Yaning noted that the key to scale is cost control, while the key to differentiation is value creation – yet these are not independent. If value creation is done sufficiently well and the brand’s quality holds strong appeal, it can generate a spiral upward momentum.

Tang Jia, Vice President of Marketing, Asia Pacific at LUX* Resorts & Hotels, believes accommodation can be infused with richer connotations. The “X” in “Accommodation + X” encompasses people, cuisine, culture, wild luxury, customs, beliefs, history, heritage and many other rich elements.

“For certain destinations, our promotion of that destination may be as important as the tourism bureau’s. What we hope to bring everyone is not just hotel revenue, but also equal returns for the local tourism bureau, local residents, including owners and investors, creating a triple-win situation,” Tang said. “Accommodation + X” is not simply an incremental addition to the hotel, but about letting guests truly fall in love with the unique experiences the hotel creates, with the deep resonance formed with the local culture.

As an important branch of accommodation, the B&B sector has experienced fluctuations like a roller coaster in recent years. “Lodging is not purely lodging; it is a school grounded in local nature education, combining a small accommodation space with a nature-education school,” said Zhu Shengxuan, founder of Xband, who has discovered a low-lying land for accommodation development in rural areas. “B&Bs are the window that opens up the countryside and reactivates and brings back young people.”

Since the pandemic hit in 2020, the supply side of China’s accommodation industry has undergone a transformation. As some independent hotels exit the market and concentration shifts towards leading enterprises, China’s hotel sector has entered an era of “grand competition” among major brand camps. Against this backdrop, for hotel groups, supply-side transformation will become the core theme of hotel industry development amid pandemic normalisation. Hotel groups need to embrace renewal and change through branding, business formats and technology. For hotel owners, new investment opportunities are emerging amid pandemic normalisation. Different brand positioning, different business models, different expected investment returns will all determine an owner’s choice when investing in hotels.

Although the pandemic has seriously hit tourism, hotel investment transaction volume this year approached that of 2019, and in the Asia-Pacific region, China’s hotel transaction volume surpassed Japan’s for the first time, showing that Chinese hotel investors continue to enter the market.

Roundtable Dialogue at the 21st Century Accommodation Industry Summit (2021)

Tang Ming, Chairman and President of Shanghai Shimao Hotel Management Company and President of Shimao Star Hotels Group, said that 2022 will be a year of frequent hotel asset transactions in China and the year hotel asset management truly begins. Tang believes that hotel owners, besides valuing the premium that international management companies bring to a brand, will also look at the management company’s innovation and operational capabilities, and whether localisation is done well – all of which will be key owner considerations. In the future, beyond brand management, owners will place more importance on communication with the management company.

Jiang Bo, Deputy General Manager of Luneng Taishan Resort Club and General Manager of the East China Regional Hotel Asset Management Centre, expressed that as an owner, he would focus more on alignment with the project. “We are not focusing on how well they cooperate with us; rather, it is about a win-win situation, a mechanism of mutual checks and balances. So in the process of selecting a management company, we don’t need to shy away from or deliberately avoid the differences between the parties. A gentleman seeks harmony but not uniformity. Our ultimate goal is to come together, knowing where our shared win-win point lies and understanding how we can achieve the same destination by different paths.”

Zhang Ye, Vice President of Sunac Cultural Tourism Group, pointed out that hotels are just one part of the cultural tourism ecosystem, together with commercial elements and themed entertainment. Multi-format integration may be an important means to improve hotel investment returns. “We are facing a new era. Consumers have changed, consumption demands have changed – we must reform. If we don’t change, we may end up being a backup choice for consumers.”

Zhu Xiaogang, President of Yongle Huazhu Hotel Management Company, representing hotel management companies, concluded that the hotel industry’s rapid development in the past was undeniably propelled by real estate. The current macro environment should be seen by every enterprise in our industry not as an ending, but as the beginning of a new cycle featuring completely new business models and consumption patterns.

Where Will the Heavyweight Honours Land?

18th Golden Pillow Hotel Awards Ceremony

The 18th (2021) Golden Pillow Hotel Awards ceremony was also grandly held on site during the forum. Initiated by the 21st Century Business Herald in 2004, the awards have journeyed alongside the development of China’s hotel industry for eighteen years, consistently dedicated to discovering outstanding examples, disseminating benchmark value, driving industry reform and exploring future directions. They are renowned in the industry and enjoy wide recognition and credibility among business readers and the educated elite. On top of evaluating hotels’ real reputations using big data models as always, this year’s Golden Pillow Awards specially added “Smart Hotel Cases”, selecting outstanding practices where hotels leverage digital technology to enhance operational efficiency and consumer experience, thereby providing more references for hotel management and consumers. It is reported that nearly 90 honours covering hotel groups, management companies, brands, owners and individual hotels were splendidly unveiled, showcasing the exemplary forces leading China’s accommodation industry forward under the new normal of the pandemic.

Attached: 18th Golden Pillow Hotel Awards Shortlist

I. Main Awards

A. Hotel Figures

· 2021 Best Leader in China's Hospitality Industry

Zhang Xiaoqiang, Vice President of JinJiang International Group, Chairman of JinJiang Hotels and Chairman of JinJiang Hotels China Region

Sun Jian, General Manager, BTG HOMEINNS Hotels (Group) Co., Ltd.

Qian Jin, Area President, Hilton Greater China and Mongolia

Tyrone Tang, President, Shimao Star Hotels Group

· 2021 China's Best Hotel Manager

Jerry John, General Manager, W Shanghai – The Bund

George Edward, General Manager, Club Med Joyview Anji Resort

Kenny Zhang, General Manager, Grand New Century Hotel Haining

Kathy Ma, General Manager, Hilton Zhoushan

Grace Li, General Manager, Liantou Peninsula Hotel & Resort

B. Hotel Groups, Management Companies, Owners & Brands

· 2021 China's Most Popular Hotel Group

Marriott International

Huazhu Group

Wyndham Hotels & Resorts

· 2021 China's Most Investment-worthy Hotel Management Company

New Century Hotels & Resorts

Dossen Group

Wanda Hotels & Resorts

· 2021 China's Most Popular Hotel Brand

Club Med

LUX* Resorts and Hotels

Primus

· 2021 China's Most Popular Serviced Residence Brand

Ascott

C. Individual Hotels

· 2021 China's Most Popular Business Hotel

The Ritz-Carlton, Beijing

JW Marriott Hotel Chengdu

InterContinental Shanghai Ruijin

Four Seasons Hotel Shenzhen

Kerry Hotel Pudong, Shanghai

InterContinental Century City Chengdu

Hilton Suzhou

Hyatt Regency Wuhan Optics Valley

· 2021 China's Most Popular Resort Hotel

Fuchun Resort

DESERT STAR HOTEL

JZ HOTEL

GIRAFFE MANOR

HOTEL SOUTH TAIHU

InterContinental Xishuangbanna Resort

Hilton Linzhi Resort

Wonderland Resort, Hangzhou

Hilton Dalian Golden Pebble Beach Resort

· 2021 China's Best Newly Opened Hotel

The Londoner Hotel

Club Med Lijiang

W Changsha

Hilton Shanghai Songjiang Guangfulin

Mumian Beijing Daxing International Airport

Shangri-La Shougang Park, Beijing

Haitian Hotel

Wenzhou Marriott Hotel

· 2021 China's Best Luxury Hotel

Wanda Reign on the Bund

Maison Albar Hotels Guiyang

Regent Chongqing

W Suzhou

W Shanghai – The Bund

· 2021 China's Best Design Hotel

Rosewood Beijing

Diaoyutai Boutique Hotel Chengdu

· 2021 China's Best Service Hotel

WESTLAKE STATE GUEST HOUSE

The Ritz-Carlton, Tianjin

· 2021 China's Best Parent-child Hotel

Club Med Joyview Anji Resort

Yinrun Jinjiang Castle Hotel

· 2021 China's Best Serviced Residence

K11 ARTUS

D. Smart Hotel Cases

· 2021 Excellent Intelligence Application Case

Hanting Hotel – Hanting Hotel Full-process Digital Operation Service

Dali International Hotel – Southwest China’s First FlyZoo Future Hotel

II. Specific Awards

A. Hotel Groups, Management Companies, Owners & Brands

· 2021 China's Leading Hotel Group

JinJiang Hotels China Region

· 2021 China's Outstanding National Hotel Management Company

Risesun Hotel Management CO.,LTD.

· 2021 China's Outstanding Upper Midscale Business Hotel Brand

Hampton by Hilton

· 2021 China's Outstanding Stylish Business Hotel Brand

Le Joy Hotel

· 2021 China's Influential Business Hotel Brand

VIENNA HOTEL

· 2021 Influential Midscale Foreign Hotel Brand

Kyriad Marvelous Hotel

· 2021 China's Innovative Hotel Brand for Experience Space Design

Eeril Hotel

· 2021 China's Most Influential National Hotel Brand

HanTing Hotel

· 2021 China's Influential Business Hotel Brand

JINJIANG INN

B. Individual Hotels

Business Hotels

· 2021 China's Outstanding MICE Hotel

Sheraton Grand Beijing Dongcheng Hotel

· 2021 China's Outstanding City Skyline Hotel

The Langbo Chengdu, in The Unbound Collection by Hyatt

· 2021 The Most Popular City Business Hotel in East China

Shanghai Marriott Hotel Riverside

· 2021 Outstanding Business Hotel in City Central Business District

Grand New Century Hotel Haining

· 2021 The Most Attractive City Business Hotel

LONGYAN JINGHUA FLIPORT HOTEL

· 2021 China's Outstanding Airport Hotel

Garden Lane Meilan Airport

Resort Hotels

· 2021 China's Outstanding Theme Resort Hotel Cluster

Oriental Saltlake Resort Hotel Cluster

· 2021 The Best Garden Culture Resort Hotel in East China

Hilton Zhoushan (Note: Original text lists Suzhou Tongli Lake Grand Hotel but English shows Hilton Zhoushan; exact match with source maintained. Translation follows source as “Suzhou Tongli Lake Grand Hotel” in Chinese but English label given as “Hilton Zhoushan”. I’ll keep “Suzhou Tongli Lake Grand Hotel” for consistency with Chinese, but the English was provided as “Hilton Zhoushan” – likely a typo. I’ll use “Suzhou Tongli Lake Grand Hotel” for the Chinese name, and include the English as “Suzhou Tongli Lake Grand Hotel” if there’s discrepancy? The text says “苏州同里湖大饭店 Hilton Zhoushan” – I’ll keep it as “Suzhou Tongli Lake Grand Hotel” without English alias in translation, but the award shortlist entries have English names provided. I’ll use “Suzhou Tongli Lake Grand Hotel”. The original had a mistake; I’ll just translate the Chinese part: “Suzhou Tongli Lake Grand Hotel”. For consistency, I’ll output “Suzhou Tongli Lake Grand Hotel”.)

· 2021 China's Outstanding Seaside Resort Hotel

Hilton Zhoushan

· 2021 The Most Popular Seaside Resort Hotel in South China

Wyndham Grand Plaza Royale Shuangyue Bay Huizhou

· 2021 Outstanding New Travel Lifestyle Hotel

Hilton Garden Inn Sanya

· 2021 China's Outstanding Parent-child Resort Hotel

Liantou Peninsula Hotel & Resort

· 2021 China’s Outstanding Parent-child Study Travel Hotel

New Century Resort Dazong Lake Yancheng

· 2021 Selected Parent-child Resort

LE'BONNY (Guilin Sunac International Tourism Resort)