Highlights of this issue
In the domestic hotel market, there is a good story of a leading chain group and a regional small and medium-sized wine management company "holding hands".
On June 18, Guangxi Dongcheng Hotel Management Group Co., Ltd. and Shandong Baizhai Life Hotel Management Co., Ltd. formally signed an equity cooperation agreement, Dongcheng Group transferred 30% of the latter's equity, and the two sides will carry out all-round in-depth strategic cooperation in the fields of development, operation, membership, marketing, supply chain, and digitalization around the "George Morandi" (hereinafter referred to as Morandi) chain hotel product brand.
At present, many small and medium-sized hotel brands are facing a dilemma.
In the hotel industry, the mergers and acquisitions of big fish eating small fish and fast fish eating slow fish are still continuing.
What will the future of small and medium-sized hotel brands be like other than being swallowed up?
In this regard, Dongcheng gave a new answer.
That is, aiming at "small but beautiful", forming strategic complementarity and empowering growth with regional small and medium-sized hotel brands, symbiosis and win-win.
01
How many small and medium-sized wine pipes are still wandering at the crossroads?
In the past two years, with the rise of county-level tourism, the sinking market has become a new growth point, and many leading hotel groups have laid out their layouts, and the siphoning and encirclement of small and medium-sized hotel brands in the region have intensified.
Regional hotel chains must run fast to avoid being eaten by big hotel chains.
Some people in the industry once lamented that the fight in the stock era will become more and more cruel in 2024 - the head is fierce, the waist is fighting with a bayonet, and the tail is afraid that there is only fear.
For small and medium-sized chain hotels in the region, they are either "out of the circle" or "out of the game". A number of small and medium-sized hotel chains are also looking for their own way out.
Indeed, as a small and medium-sized hotel with "small fish" and "slow fish", if you don't want to be acquired by a leading hotel group, you have to hope that you will evolve and become stronger.
However, it is indeed difficult for small and medium-sized wine management companies to compete with the head wine management groups in terms of capital, talents, and brands, which requires them to expand their "circle of friends".
"Wine Management Finance" noted that in 2024, some regional wine management companies have taken the initiative to expand their "circle of friends" to seek development.
For example, Hangzhou Business Travel Group, Huanglong Hotel Management Group and Hyatt Hotels Group signed a tripartite strategic partnership. Huanglong Hospitality Group became the third-party management company for franchised hotels of Hyatt independent brands and select-service brand hotels in China.
It is not difficult to find that many small and medium-sized hotel brands in the region are at a crossroads of choice.
They realize that it is difficult to be competitive by relying on individual strength, so many small and medium-sized wine management companies have begun to choose the most suitable path for themselves according to their current development status, and leverage the head wine management group to keep up with the rhythm of the times and precipitate their own core competitiveness.
Similarly, as a leading wine management group, Dongcheng's starting point is not to annex these small and medium-sized brands in the region, but more to complement and empower growth through strategic complementarity.
Specifically, on the basis of fully retaining the entrepreneurial passion and agile organization of the founders of small and medium-sized wine management companies, we will leverage the platform resources that have been formed by our own head wine management group, adopt flexible, light and complementary capital operation methods, and jointly explore a new way out for the development of the current wine management industry.
At the Dongcheng Business Co-creation Conference, Cheng Xinhua, founder, chairman and CEO of Dongcheng Group, mentioned brand cooperation when elaborating on the future development strategy.
He hopes that those local native brands and products with brand creativity, small and beautiful in the market, will cooperate with Dongcheng, and Dongcheng will also use its own platform to empower cooperation.
For this cooperation, Cheng Xinhua emphasized that Dongcheng hopes to support Morandi Hotel to improve its operational efficiency and effectively enhance the operating efficiency and influence of China's excellent mid-to-high-end hotels through the empowerment and output of all elements of Morandi's development, membership, supply chain and IT system on the basis of Morandi's existing product brand.
02
Hand in hand with "small but beautiful", Dongcheng looks forward to finding a "bridgehead"
At present, in addition to the head hotel groups, there are still a large number of small and medium-sized chain hotels, carving up the imaginative hotel market.
The diversity of the market, as well as the obvious dispersion and differentiation of consumer needs, make it difficult for a single brand or wine management group to fully occupy the market, which means that even the head wine management group is difficult to fully cover all market segments.
Different from the layout of leading hotel groups across the country, the development of small and medium-sized hotel chains in the region is mainly concentrated in one province or one region, and a deeper connection can be achieved by virtue of local understanding.
In the vast regional market, there are a number of small and medium-sized wine management companies, which are usually deeply engaged in market segments, creating cost-effective, original, and difficult to imitate brand products or services, and have a certain share or voice in a certain market segment.
Who is Morandi working with Dongcheng?
It is understood that the Morandi hotel chain was established in 2018 and is positioned as a new luxury lifestyle brand, mainly concentrated in Shandong, with layouts in Jiangsu, Xinjiang, Henan and Hebei, and currently has nearly 100 stores.
Despite its small size, it is a popular small but beautiful brand – consumers love this mid-to-high-end business and light luxury hotel that leads the design trend because it is more upscale, more western, and better looking at photos; Investors prefer its "lower investment, higher grade" investment model.
"Wine Management Finance" noted that Morandi is the first wine management company with strategic investment and cooperation in Dongcheng.
Why did Dongcheng choose Morandi as the first stop of its external empowerment?
A person familiar with the matter told "Wine Management Finance" that the choice of the "small and beautiful" Morandi Hotel is a reinforcement of the mid-to-high-end product chain of Dongcheng Group. Based on this in-depth cooperation with Morandi Hotel, Dongcheng will establish a "bridgehead" in the mid-to-high-end market, creating mid-to-high-end products including Echarm PLUS, Zhencheng, Jincheng, etc., and gradually opening up the company's brand influence in the mid-to-high-end market.
It is reported that thanks to the design and engineering background of its team, Morandi has obvious advantages in products, design, engineering management, etc., and has created a hotel product that "achieves mid-to-high-end market performance through mid-range cost".
And these are the things that Dongcheng thinks the Morandi Hotel can strengthen itself.
The industry believes that the strategic cooperation with Morandi marks that Dongcheng Group is taking a substantial step forward on the road of enriching the layout of mid-to-high-end products by strengthening efficiency internally and investing abroad.
After all, with the increasingly fierce competition in the market, hotels will eventually have to return to fighting for products and services, and whoever has a better user experience and higher efficiency will have a better chance of winning.
03
Dongcheng's joint vertical and horizontal technique: in-depth cooperation and common development
The chain operation of the large wine management group can realize the layout of the regional market, but it is easy to adapt to the complex characteristics of regional development.
Although regional small and medium-sized hotel brands have the knowledge and experience of deep cultivation in the region, they have obvious shortcomings in capital, team and professional system operation in the process of realizing chaining.
The same direction is competition, and the opposite direction is competition. Perhaps the best ecological model in the hotel industry is to complement each other strategically and empower growth, and give full play to their respective advantages for win-win symbiosis.
Dongcheng chooses to join the regional market competition in the form of strategic complementarity and empowering growth.
Specifically, the cooperation between the two sides mainly focuses on four key points:
With Morandi's Shandong region as the regional center, the two sides will jointly develop and expand the brand through inter-provincial replication and regional deepening, extending to Hebei and Beijing in the north and Jiangsu and Henan in the south.
It is reported that the two sides have completed the global layout and pilot of Shandong from a new first-tier city to a fourth-tier city.
Through member connection and system docking, Dongsheng's strong membership system will help Morandi effectively expand marketing channels, reduce customer expansion costs, and improve customer expansion efficiency.
Morandi's reinforcement of products, design, and engineering management has been mentioned earlier, and relying on the advantages of centralized procurement of high-quality suppliers in Dongcheng's supply chain system, the Morandi brand can support the rapid expansion of the brand with a lower cost and a shorter preparation period.
Not long ago, Dongcheng's organizational reform was upgraded again, requiring cadres to rush to the front line.
Regarding this cooperation, He Bin, co-founder of Morandi Hotel brand, said that Dongcheng not only wants to improve the management and operation level of its first-tier hotels, but has also begun to benefit the development of existing small and medium-sized wine management companies.
It is not difficult to find that the empowerment provided by Dongcheng is not a world, but to create a hotel ecology that is both flexible and practical, and empowering and symbiotic.
As Cheng Xinhua, the founder of Dongcheng Group, said, "Dongcheng and Morandi have similar values, trust each other, and learn from each other. I believe that on the basis of Morandi's excellent team, products and operations, Dongcheng will do a good job in platform empowerment and back-end support for Morandi in the future, which will definitely promote Morandi to build more good stores and products in the future, and realize the common growth and development of both of us." ”
Of course, empowerment doesn't have to be entirely self-centered.
It's like Fat Donglai doesn't want to open a branch, but exports his own supply chain capabilities; Huawei does not build cars, but outputs intelligent solutions.
Those who indulge in it are strong in the crowd. Good at using their own advantages to empower, but also make partners glow with new vitality.
It is foreseeable that the in-depth cooperation between Dongcheng Group and regional small and medium-sized hotel brands will ignite a spark in the regional hotel market and boost the local hotel market to enter a new journey.
Co-ordinator丨Lao Dian Editor丨As
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