Study Strategies Of Investing And Operating Economic Hotels

Characterized by the low price, coziness, and convenience offered, economical hotels, targeting at families on vacation, government staff, self-financed tourists, businessmen and people attending conventions, have emerged as a bright spot in the development of domestic hotel industry in recent years. It operates in the mode of promoting final products and winning the market in a relatively low price by lowering down costs in investment and business operation on the basis of meeting the customers'primary needs of doing business and traveling. Well developed in European and American countries, taking up more than 70% of the market share of the hotel industry, economical hotels, however in China, are still at the fledging stage, although the pioneers have earned considerable profits. Vigourously developing international-standard economical hotels in China is conducive to the establishment of national brand of Chinese economical hotels, better confrontation toward challenges in this industry brought by China's entry into WTO, full integration of such idle resources as scattered star hotels and some other hotels in the society, and improvement of the service and reception ability of domestic hotels.Adopting SWOT, the thesis carries out a comprehensive analysis on the advantages and disadvantages of Chinese economical hotels and opportunities and threats they are faced up with. Among many advantages enjoyed by economical hotels in terms of price, cost, customer resource, market, network, profit and conception, the price boasts the biggest edge since the price of 150 RMB to 250 RMB is widely acceptable for above 70% of salariat in China. The disadvantages lie in the poor system division, not-clearly-established ownership and badly defined power and responsibility, shortage of talents and disordered competitive price. Opportunities are offered by the development of tourism and meeting and exhibition industry. The tourism industry has not entered its growing stage until 2005, with over 20% of year-on-year increase in tourism income. In 2020, China will become the biggest tourism country in the world, accepting 137 million foreign tourists per year. And agreat customer resource will be tapped as the result of development of the meeting and exhibition industry at the rate of 16% per year. But the fierce market competition, difficulty in developing and construction, risks in business running under lease, the influence from estate and substitution etc. pose as threats to economical hotels in China. Generally speaking, however, advantages outweigh disadvantages, opportunities outweigh threats.According to the theory of investment return analysis, the thesis calculates the investment return period respectively of self-establishing a single brand economical hotel and becoming a franchisee of domestic brand economic hotels, the former being about three years and seven months, the latter three to five years. In consideration of the capital security, it is better for less resourceful investors to choose to be the franchisee, more competitive investors to establish their own brands, which can bring them direct investment return, brand earnings and management return.In order to effectively fend off increasing competitive risks, improve competitive edges and achieve rapid growth in strength and scale , economical hotels should adopt the modes of franchising and output management, strengthen the technology innovation ability and enhance the core competitive ability. The thesis, in terms of business operation, proposes a series of new strategies such as branding, chaining, grouping, costing, socializing, scientific, specializing, internationalizing, external-orienting , talent training, digitization, and networking.