The truth is, economy hotels are priced as high as five-star hotels? Simple analogies are meaningless
This summer, the tourism market is booming, and the news of hotel price increases in popular cities such as Beijing has sparked heated discussions. Among them, the prices of some popular chain brand economy hotels in some popular areas once reached as high as a thousand yuan, causing tourists to exclaim "I can't afford to stay!" For a while, the saying "economy hotel prices are as high as five-star hotels" continued to be heard.
Has economy hotels become "uneconomical"? At the 18th anniversary celebration of 7 Days Hotel held in Shanghai recently, Chen Yu, the brand president of 7 Days Hotel in Jinjiang, stated that the "price assassins" of economy hotels mainly occur in first tier and new first tier cities. During the peak season, there is an influx of people and high demand, and hotels occupying scarce positions themselves have higher value. Once entering the off-season, hotel prices immediately fall, which is a natural market supply and demand pattern. It is not scientific to conclude that the prices of economy hotels in special locations are close to those of five-star hotels due to their short-term high prices.
Has economy hotels become "uneconomical"? At the 18th anniversary celebration of 7 Days Hotel held in Shanghai recently, Chen Yu, the brand president of 7 Days Hotel in Jinjiang, stated that the "price assassins" of economy hotels mainly occur in first tier and new first tier cities. During the peak season, there is an influx of people and high demand, and hotels occupying scarce positions themselves have higher value. Once entering the off-season, hotel prices immediately fall, which is a natural market supply and demand pattern. It is not scientific to conclude that the prices of economy hotels in special locations are close to those of five-star hotels due to their short-term high prices.
A hotel industry insider said, "The Beijing tourism market is very hot this summer, and there are indeed economy hotels priced around 1000 yuan. However, these hotels are generally located in prime tourist areas and have relatively new facilities. At the same time, similar locations and high-quality five-star hotels usually have room rates of 2000 yuan or even 3000 yuan per night, which is not comparable to the room rates of economy hotels."
In the previous heated discussion about economy hotels approaching five-star hotel prices, first tier cities such as Beijing and Shanghai have become the focus of attention. What are the facts? The reporter found that, taking Shanghai as an example, where the tourist flow was booming in the middle of August, the same brand of economy hotel, its stores near Nanjing Road Walkway cost more than 800 yuan a night, while the price of the brand hotel dropped to 400-500 yuan near Dagu Road, which is about 15 minutes' walk from the People's Square. If tourists want to stay cheaper and are willing to stay further away from the core tourist area, their options can be wider.
In fact, for budget hotels with decades of development history in China, the popular "special forces style tourism" among young people is bringing more opportunities. As one of the earliest budget hotel brands in China, the 18-year-old 7-Day Hotel has become a witness to the growth process of budget hotels in China and is entering a new stage of development. Chen Yu said that the opening of the 7-Day Hotel 3.0 version, which belongs to Jinjiang Hotel, has exceeded 100 stores, and has gained high recognition from investors and consumers for its highly competitive business model and youthful and energetic product experience, once again highlighting the development resilience of top brands. In the first half of this year, the overall RevPAR recovery rate of the 7-day brand remained above 100% compared to 2019.
A hotel industry insider said, "The Beijing tourism market is very hot this summer, and there are indeed economy hotels priced around 1000 yuan. However, these hotels are generally located in prime tourist areas and have relatively new facilities. At the same time, similar locations and high-quality five-star hotels usually have room rates of 2000 yuan or even 3000 yuan per night, which is not comparable to the room rates of economy hotels."
With GDP growth and upgrading consumer experience, a group of economy hotel brands have upgraded to a range of mid to high end hotel formats through market segmentation. But Chen Yu believes that from the perspective of China's overall population income structure and consumption level, economy hotels will still be the basic market for the next 5-10 years. "Economy hotels mainly serve young people born in the 1980s and 2000s, who have a high frequency of travel, but the average price per trip is not high." Big data shows that the price range for young people choosing accommodation is concentrated between 175 yuan and 196 yuan, especially after the epidemic when young people pursue cost-effective consumption. The rise of special forces tourism this year is an example. In China, economy hotels still have significant development potential.
