Pandemic spurs adaptation, upgrades in China's hotel industry

Hu Min
As more hotels reopen their doors, many are focusing on tech-savvy guest experiences and improved services.
Hu Min
Pandemic spurs adaptation, upgrades in China's hotel industry
Ti Gong

A guest collects food delivered by a robot at a Huazhu Group hotel.

Huazhu Group, one of China's biggest multi-brand hotel chain management groups, announced on Friday that it is taking a technology-savvy approach to the accommodation experience of guests at about 2,000 of its hotels amid the COVID-19 pandemic.

Lynn Jiang, a marketing employee at a technology company, used a self-service machine to handle her check-in at a Ji Hotel outlet in the Hongqiao area of Changning District. She finished the process in seconds by a few simple clicks and face recognition. She ordered a meal via mobile phone and the food was delivered by a robot to her room.

"Non-contact service makes me relieved as it eliminates the hazards of infection from human-to-human contact," said Jiang, who is on a business trip this week. "It is also time-efficient."

Similar changes are happening across China's hospitality industry under the pandemic.

Ji Qi, founder and executive chairman of Nasdaq-listed and Shanghai-based Huazhu Group, made a livestream debut with Sebastien Bazin, chairman and CEO of French hotel chain Accor, on Thursday night to share insights on the revitalization of the global hospitality industry and its present and future trends. 

It attracted 1.3 million views. 

Pandemic spurs adaptation, upgrades in China's hotel industry
Ti Gong

A cleaner disinfects a check-in and check-out machine at a Huazhu Group hotel.

In the first two months of 2020, the loss of business turnover at China's hotels and minsu (Chinese-style B&Bs) surpassed 67 billion yuan (US$9.37 billion), according to a report by China Hospitality Association.

In February, the average turnover of medium and high-end hotels in China slumped 86 percent from the same period last year, and nearly 75 percent of hotels closed, with average closing times hitting 27 days, according to the association.

Some hotels of Huazhu, which operates nearly 6,000 hotels across China, have become fully automated for guests, from room booking to ID card scanning, face recognition, and robot delivery.

About 50 percent of guests use self-service machines daily for check-in, and nearly 75 percent for check-out. Robots have delivered items or meals about 200,000 times per month on average.

These measures lower the risks of cross-infection, cut human costs and lift service efficiency, the group said.

"In the past decades, the hospitality industry has focused on branding and management, while in the next 10 to 20 years, technology will become a key word for hospitality companies," said Ji in the live broadcast.

The hotel chain still kept 30 to 40 percent of outlets open when the outbreak was at its most serious in China.

This was a dark period due to concerns about staff being infected, but quarantined people, medical staff and homeless people still needed places to stay, said Ji.

Accor has resumed the operations of 2,000 hotels out of 5,000 worldwide.

"We are reopening almost 100 hotels per week. With every week that passes, I am seeing the light at the end of the tunnel," said Bazin in the webcast.

Pandemic spurs adaptation, upgrades in China's hotel industry
Ti Gong

Ji Qi, founder and executive chairman of Huazhu Group (left), hosts a live broadcast on the revitalization of the hospitality industry on Thursday night. 

Both held a positive view on the long term.

"Rents decrease, and guests will choose cleaner, more reliable hotels which highlight health and safety, and it is a good thing in the long term although we face a lot of difficulties now," said Ji.

"The first thing guests will look at is health and safety now and they will pick rooms they can sleep in without stress and anxiety," said Bazin.

The survey by Huazhu Group revealed that 94.2 percent of guests highlight hygiene and environment as their priority when they select hotels, a rise of nearly 21 percentage points from before the coronavirus.

The group has introduced enhanced hygiene standards and strengthened disinfection measures.

Although the COVID-19 outbreak has delivered a heavy blow to the whole hospitality industry, it also promotes product and service upgrades of brand and chain operators and accelerates the digital and intelligent process of the industry, experts said.

"China's hospitality industry has suffered different levels of profit downturn, while the coronavirus will not change demand and the future of the industry is promising," said Zhang Rungang, deputy director of the China Tourism Association.

Hotel operators should use this period to review their development and embrace upgrades in the industry, he said.

There have already been signs of a recovery.

Online travel operator Tongcheng said its hotel-booking volume on May 20 witnessed an overall rise of 21 percent from the same day last year, with a 36 percent increase for third- or fourth-tier cities.

Hotel bookings show a significant rebound since May, it said.

In May, the occupancy rate of Huazhu has recovered to nearly 80 percent of the same period last year. It did not lay off any employees or cut salaries during the pandemic.

"The third- or fourth-tier cities are rebounding more quickly than high-tier cities because the majority of guests there are locals," said Ji.

"We will highlight more on emerging business areas, communities, and areas along high-speed railway stations and new airports in response," said Ji.

Some hotels have been eliminated from the market.

"It is not a bad thing because supply exceeds demand in China's hospitality industry," said Zhang. "Some independent, small and medium-sized hotels are seeking to franchise under the impact of the pandemic."

In China, there are more than 40 million rooms operated by nearly 1 million medium-sized and small independent hotels, and many of them are in third- or fourth-tier cities.

Huazhu said its expansion target of more than 10,000 new hotels in 1,000 cities in the next three to five years will not change.

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