14 new hotel developments – Accor expands in China’s midscale and upscale hotel market
Shanghai – 14 December 2016
Huazhou Hotel Group plan to develop 14 new hotels with franchisee Accor in Greater China with it’s subsidiary Yagao Meihua Hotel Management. The majority of the new projects under Yagao Meihua’s management as a result of the alliance are located in China’s first- and second-tier cities, including over 10 located in Shanghai. Six new Mercure hotels and one new Novotel hotel have been opened so far.
Huazhu’s and Accorhotels’s loyalty programs together have a combined membership base exceeding 100 million. Their respective central reservation systems (CRSs) have been fully integrated, helping the two hotel groups achieve initial success with their cross-selling approach. The Mercure Shanghai Royalton is the first Mercure hotel to be taken over by Huazhu. In the more than one year since being taken over, the hotel’s average revenue per available room (RevPAR) has increased by 150 yuan, while the occupancy rate has improved from 65 to almost 90 percent. The gross operating profit (GOP) has jumped to over 60 percent.
The Mercure Shanghai Hongqiao Airport, which opened in September 2016, began to run at full occupancy within one month of opening, thanks to the two group’s dual-platform distribution model. Currently, Chinese guests make up nearly 70 percent of the hotel’s occupancy, with guests from abroad accounting for the remaining 30 percent. An analysis of the booking patterns of the domestic guests shows that 40 percent of them reserved through Huazhu’s official reservation platform while 30 percent of the bookings were generated from Accor’s official reservation channel.
Up to 15 percent, or more than 200 million people, of China’s population is predicted to become high-income consumers each with annual income of more than 200,000 yuan by 2030, according to the Economist Intelligence Unit’s (EIU) recently released report, The Chinese Consumer in 2030. As a result, high-end hotels can look forward to huge development opportunities. In addition to the management of Mercure hotels in China, Yagao Meihua Hotel Management also plans to focus on the expansion and growth of the Novotel, Grand Mercure and Joya Hotel brands. The group expects to open more mid- and upscale hotels next year.