Airbnb’s breakup: No one is wrong

Welcome to the WeChat subscription number of “Sina Technology”: techsina

Text | Li Kangping Editor | Zhang Zeyi

Source: Youshu DataVision

On May 24, Airbnb, which has been operating in China for nearly seven years, officially announced that it will suspend support for domestic travel listings, experiences and related bookings in China on July 30, 2022.

The latest data shows that Airbnb has nearly 500,000 listings in China, accounting for about 8% of the company’s total global listings, while revenue from China only accounts for 1% of total revenue.

There are many ways to explain Airbnb’s exit: China is attacked by OTA giants such as Ctrip, Meituan, Fliggy, etc. Airbnb’s landlord and resident services have not been able to localize and improve, and the sharing economy is facing difficulties. Rules and so on…

But at the end of the day, Airbnb just failed to survive this winter in the hospitality industry.

In this article, we will discuss three issues facing the hotel industry today:

1. What kind of hotel can still make money?

2. Why is there a differentiation between high-end hotels and budget hotels?

3. Is the homestay industry in China facing the same predicament?

01

Hotel performance is polarized

Without tourism, who would stay in a hotel?

Describe the hotel performance in 2021 in one sentence: make a little money at the high end, and make a little shout at the low end.

The so-called high-priced hotels refer to hotels with an average room price of more than 700 per night, generally including W Hotel, Four Seasons Hotel, Shangri-La, InterContinental Hotel and other self-built high-star hotels.

And a hotel with a price of 100-300 per night is cheap and can also be said to be a budget hotel, generally represented by Home Inn, 7-Day Holiday, Jinjiang Inn, and Hanting franchised hotels.

There are basically three large-scale domestic economy hotels: Jin Jiang Hotel, BTG Hotel, and Huazhu Group. The total market share of these hotels is as high as 43.31%, which is almost half of China’s hotel industry. There are a series of well-known chain hotel brands such as Jinjiang Inn, Hanting, Home Inn, etc. It can be said that the performance of these three hotels can basically reflect the performance of budget hotels. Operating conditions.

Among these three, only BTG Hotel will earn 10.11 million in 2021, and the data of Huazhu Group and Jin Jiang Hotel’s deduction show that these two are still losing money and have not recovered from the impact of the epidemic. It can be said that low-end hotels The performance repair is not good, and it is basically still struggling in the quagmire of losses.

Compared with the wailing of low-end hotels, high-end hotels are operating in a prosperous manner.

High-end hotels are basically multinational hotels, including Marriott Group, Hilton Group, InterContinental Hotels, etc. Because foreign countries have abandoned strict epidemic prevention policies and the attributes of high-end hotels themselves, compared with low-end hotels, the performance of high-end hotels faster recovery.

Both high-end representatives Hilton and Marriott have turned losses into profits in 2021, and their profits have improved to a higher level than before the outbreak, while the second-tier InterContinental Hotels and Select International have also achieved rapid growth in net profit. It doubled and the highest growth rate reached 380%. It can be said that it has fought a beautiful turnaround and almost got rid of the influence of the epidemic.

From the perspective of the occupancy rate, the core indicator of the hotel industry, the occupancy rate of high-end hotels is recovering significantly. In 2021, the OCC (occupancy rate) of Hilton and Marriott will basically maintain a year-on-year growth rate of more than 40%, while low-end hotels represent Jin Jiang Hotel occupancy. The year-on-year growth rate was only 3.9%, and the lowest year-on-year growth rate of Huazhu Group was only 1.4%.

At the same time, from the perspective of RevPAR (average room price), Hilton’s year-on-year growth rate in 2021 will reach 60.4%, while Huazhu Group, which has the highest economy among the three brothers, is only 13.81%. It can be said that economy hotels cannot outperform high-end hotels in terms of price. , and in terms of volume, high-end hotels are also running fast.

Guess why?

02

Fragmented low-end hotel base

Although they are all rented houses, there are also ways to rent houses.

Most directly from a business point of view, economic chains are highly bound to tourism, and they can only rely on room revenue. But in high-end hotels, there are more tricks to play.

For example, high-end hotels can host weddings, but I have never seen anyone going to Hanting to get married. In addition, the source of income of high-end hotels also includes related catering, exhibition services, and supporting services. The structure is diverse, and the impact on the epidemic is relatively small.

In general, most hotels’ revenue is divided into three parts, namely room revenue, catering revenue, and ancillary revenue. For example, Shangri-La’s revenue in 2021 will be US$1.241 billion, of which room revenue is only US$453 million, accounting for only 36.46%, while catering services will account for 41.07%, and the overall revenue is relatively balanced.

For low-end hotels such as Huazhu Group, 86.52% of its revenue comes from room revenue, and catering accounts for only 8.55%. Once the room operation is abnormal, it will directly affect the overall profit.

Moreover, most of Huazhu Group’s catering relies on guest room users, that is, breakfast is only open to guest room users, not the catering of high-end hotels that can be open to the public, and its revenue-generating ability is not as good as that of high-end hotels.

At the same time, economy hotels generally only operate guest rooms, and the main source of guest rooms comes from two parts: tourists and business people.

The first is tourism. In 2021, with the gradual slowdown of the epidemic, the tourism industry will recover to some extent, but then the epidemic in Xi’an and Shanghai has recurred, and the epidemic prevention policies in various places have been tightened day by day, and the recovery efforts are obviously insufficient. performance can be seen.

According to relevant media reports, 100 tourism companies lost a total of 31.5 billion last year. Among them, China CDFG, which earned 9.654 billion, and Meituan, which earned 14.1 billion, turned the tide. It is estimated that the loss is even more terrible. If the epidemic continues to rage, it is estimated that all stocks in the entire tourism sector will be ST.

However, some people think that according to the data of the National Bureau of Statistics, the number of tourists in 2020 will be 2.879 billion, and in 2021, it will be 3.25 billion, which shows that the tourism industry is recovering. But what the Bureau of Statistics did not say is that the tourism in the past two years has been characterized by “localization and small radius”, that is, travel around the city, and return on the same day.

Even if you don’t return on the same day, you can choose camping instead of hotels, which has stimulated the development of camping equipment, and the bookings of camping products have increased by more than 3 times year-on-year during the same period.

On the tourist side, budget hotels are no longer enough, but what about business travel? Basically, they were all taken away by mid-to-high-end hotels.

Travel generally means that people travel freely, food, clothing, housing and transportation are all responsible for themselves or the tour group. During the epidemic, it is necessary to save some money. The tour group also thinks the same, so it is more inclined to budget hotels.

The cost of business travel is more borne by the company. Except for a small number of working class who empathize with capitalists, most people’s reimbursement expenses are based on the highest standard.

Therefore, according to the data of Ctrip Business Travel, with the improvement of business travel subsidy standards, mid-to-high-end rooms have gradually become the first choice for business travel, while economical rooms have gradually been abandoned.

In 2019, budget hotels still accounted for 34.26%, and in 2020, it dropped to 31.7%, while the proportion of mid-range hotels increased from 54.83% to 58.16%, and high-end hotels maintained from 10.9% to 10.14%. The three types are economy The proportion of hotels declined the most.

The number of new tourists in tourism is difficult to maintain, and the existing tourists are sucked up by camping. Business orders cannot compete with mid-to-high-end hotels, and there is no revenue to make up for the gap in room revenue, so the operation of economic hotels will naturally collapse.

From the perspective of the economic environment, hotels, as optional consumption, have gradually decreased in the proportion of residents’ expenditures in the post-epidemic era. The price reduction of high-end hotels has also directly destroyed economic chain hotels from the perspective of cost performance.

In the first half of 2021, the room price of high-end luxury hotels in Phuket, Thailand fell by 39% to 2,342 baht per night. According to elong and Ctrip, the unit price of most five-star hotels in Wuhan has dropped to 300 to 500 yuan. It even fell below 300 yuan.

Moreover, high-end hotels are aimed at wealthy people, and the room fee of several thousand yuan a night is not a particularly heavy burden for them. No wonder Jin Jiang Hotel and BTG Hotel both sent out a signal in the painful annual report: marching towards high-end.

03

Homestays are more and more like hotels

In addition to these chain hotels, the business of renting houses is also a part that cannot be ignored, but the homestays, which have always been known for their personalization, have become more and more like hotels under the pressure of the epidemic.

The biggest difference between a homestay and a hotel lies in the uniqueness of the homestay, that is, the unique geographical location, the personalized decoration style, and the different management methods from the hotel.

In the middle of 2020, when the epidemic had just eased, the number of homestays began to surge, but the reason for the increase was not because there were too many customers, but because many people lost their jobs and followed the advice of experts and used their idle houses for rent. Flexible employment.

A decrease in demand and an increase in supply will inevitably lead to a decrease in prices. Therefore, after the epidemic, the acquisition of homestays has also worsened.

Although according to data from the Tujia platform, in 2019, the transaction scale of the domestic online homestay market was 20.94 billion yuan, and in 2020, it dropped to 12.58 billion yuan, a decrease of about 40%.

Another feature of homestays is that the location of homestays is relatively special. Ordinary hotels are generally close to subway stations, such as hotels such as Hanting Home Inn; or close to areas such as CBD, such as the Westin Hotel on Beijing Financial Street. Most of the homestays are close to scenic spots and tourist areas, and the customers are mainly tourists.

There are no excess tourists in the upstream tourism industry, and it is naturally difficult for the downstream homestay industry to generate income. In addition, the initial investment of homestays is greater than that of hotels, and nearly three-quarters of homestays have no short-term turnover of 1 million.

In this market, the “homestay service providers” are the ones who live the best. The service content includes advertisment promotion, keyword optimization, property beautification, platform recommendation application, etc. They do not directly own the property, but only Charge landlords a monthly or annual service fee.

It doesn’t matter if no one is staying, the management fee is a lot, and the rent from the landlord is indeed a winner in life.

The team that manages the house like this is called the Marriott Hotel Management Group. I wonder if there will be a XX B&B management group in the homestay. Once it does, the boundary between the homestay and the hotel will be further blurred.

Homestays that have always wanted to get rid of the shadow of the hotel can only grow more and more like a hotel involuntarily during the epidemic.

04

end

Careful observation shows that the industries most seriously injured in the epidemic, such as hotels, catering, and online entertainment, often have one thing in common: the supply of the industry is actually saturated or even excessive, and what is lacking is consumers who pay the bill.

Therefore, for many industries, the epidemic is only a catalyst. Even if there is no epidemic, the structural problems of the industry itself are already obvious. The consumer market shaped by the huge population base has created many business myths, but now, consumers have become timid. what is the reason?

It’s not because of lack of money, is it?

References:

[1] Jin Jiang Hotel, BTG Hotel Annual Report 2012-2021 Flush Flush

[2] Huazhu Group, Shangri-La Group 2021 Annual Report Flush Flush

[3] 2021 China Sojourn and Vacation White Paper Mafengwo

[4] Jin Jiang Hotel, strong expansion of stores, active integration, hotel leader starts again Guosheng Securities

[5] Weekly observation of leisure service industry: Surrounding tours may continue to dominate the New Year’s Day & Spring Festival, and the recovery is gradually under the prevention and control of the new normal. Soochow Securities

[6] Social Service Industry Weekly Report: The demand for cultivated diamonds has surged, and there is room for improvement in the penetration rate. AVIC Securities

[7] 2021 China Accommodation Industry Development and Consumption Trend Report Tongcheng Yilong

[8] China Tourism Industry Insight Report Fastdata Pole Numbers from January to April 2022

(Disclaimer: This article only represents the author’s point of view and does not represent the position of Sina.com.)

This article is reproduced from: http://finance.sina.com.cn/tech/csj/2022-05-24/doc-imizmscu3169075.shtml
This site is for inclusion only, and the copyright belongs to the original author.