Forced Rise Hotel Product Differentiation Impact On Competition In Labor Costs

Rich but cheap labor has always been regarded as the foundation of Chinese enterprises to participate in market competition and maintain the price advantage. However, Chinese labor cost has been rising in recent years. It encourages the competition methods of Chinese enterprises changing from price competition to non-price competition, which includes product differentiation competition. Hotel industry, as a labor-intensive industry, also faces the problem of rising labor cost. Its productions and services have been more and more different and personalized.The essay start from the grim labor cost problem, trying to make clear the relationship of the hotel rising labor cost and the hotel product differentiation competitive behavior. The two are contradictory. On the one hand, the rising labor cost leads to hotel lower profits, which may interfere with the conduction of hotel product differentiation competitive behavior. The conduction of the hotel differentiation competitive behavior may also result in the higher labor cost. On the other hand, hotels may choose the product differentiation competitive strategy to resolve the labor cost problem.The innovation of the article is that we found that the rising labor cost has a reversed effect on hotel products and service. It makes hotel managers give up the traditional management model. To clarify the relationship of the rising labor cost and the product differentiation competitive behavior is good for the hotel to resolve the labor cost problem and to conduct product differentiation competition.