A Research On The Competitiveness Of China Midscale Hotels From The Viewpoint Of Dynamic Capability

Hotel industry is one of the first industries opened for foreign investors since1978when China began to implement its "open door" policy. Over the past thirty years, the midscale hotels as a group, being the corner-stone of China’s hotel industry, have made tremendous contribution to China’s travel and hospitality industry. However, the business environment for China midscale hotels has changed substantially in recent years, as China’s continuing social and economy development has caused structural change of the tourism market, as well as consumer ideology and behavior. As the competition landscape evolves, the midscale hotels ought to establish dynamic competitive reaction mechanism, in order to seize the opportunity of China tourism industry advancement. Based on the merit of the dynamic capability and enterprise competitiveness theories, this paper intends to study the competitiveness of China midscale hotels in the context of their business environment, from the perspective of how to match capability, resources, and the dynamic capability mechanism.This paper is organized as follows:Chapter1gives a definition for the midscale hotels discussed. Midscale hotel refers to a class of hotels that fall between upscale hotels and economy hotels, and that serve the mass market with comfortable rooms and value-for-money services. In China today, midscale hotle includes full-service hotels with three-star standards and limited-service hotels in the upper market. Room rate of midscale hotels is usually set in the range of Rmb200to Rmb400.Chapter2reviews the brief development history of China midscale hotels, and summarizes the trends in industry growth, investor diversification, revenue sources, economic performance and shift of customer constitution. In Chapter2, a particular study is conducted on the situation of the emerging limited-services hotel group, and identified the innovation elements in terms of its business model, branding strategy, operation management and hotel architect design. By contrasting the old and new business model of the midscale hotels, it points out that the key problems with the midscale hotels include the path over-dependence, the co-existence of over- competition and insufficient competition, and the low efficiency of resources allocation resulted from low enterprise capability.Chapter3contains a brief review of published research papers on midscale hotel management as well as literatures on enterprise compete-tiveness, from which this paper draws a great deal of inspiration.Chapter4studies the determining factors to the competitiveness of China midscale hotels and the systematic mechanism. Enterprise resources, capability and the dynamic capability mechanism were identified as the key determining factors, with the outer environment being an important influencing factor. A research frame work was built on this basis. After a thorough analysis on the three key competitive factors and the business environment, a model for building competitiveness for midscale hotels was constructed, and associated assumptions were also raised.Chapter5conducts an experimental research on the determining factors and the mechanism for the competitiveness of midscale hotels. Based on the adequate samples collected, a comprehensive analysis was performed using SPSS16.0and AMOS18.0software. The key contributing factors for enterprise resources, capability and dynamic capability mechanism of midscale hotels were identified, and the model for formulating hotel competitiveness was tested. To have a better understanding of the current status of China midscale hotels’competitiveness, a purposely designed questionnaire investigation was conducted. Investigation results were then analyzed using AMOS model, thus the relationship between enterprise resources, capability and the dynamic capability mechanism was found, and therefore the path model about the three determining factors was established for analyzing the competitiveness of midscale hotels.Chapter6studies the business environment that shapes the competetiveness of China midscale hotels from two dimensions. The macro-environment analysis includes analysis on institutional arrangement, economy conditions, market development, social and culture evolution, as well as technology advance. In the micro-environment analysis, Michael Porter’s five forces analytical framework was adopted. The five forces which midscale hotels are confronting, namely new entries, alternative enterprises, buyers, suppliers and peers, were examined in details.The purpose of this research is to find solutions to sharpen the competitiveness of midscale hotels. Based on the theoretical and experimental research findings, also taking into account the current status of the competitiveness of China midscale hotels, Chapter7contains in-depth discussions on the following key issues and challenges: firstly, it indentified different development path and direction for various group hotels within the middle market, after contrasting the various groups’business performance. Secondly, considering the change of business environment dynamics, midscale hotels should conduct multi-channel marketing based on detailed market segmentation and tailored positioning. Thirdly, from the perspective of improving the dynamic capability mechanism, the necessary of organizational innovation and its pattern are analyzed. Fourthly, in order to compete with hotel chain groups, the standing-alone midscale hotels would be better-off to adopt web-based enterprise resources integration strategy, and establish online alliance to secure valuable resources, enhance marketing efforts, lower costs and improve customer satisfaction. Lastly, the management innovation of state-owned three-star hotels was discussed in particular.