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Home >> Life
UPDATED: 13:24, October 05, 2006
Bed, breakfast and blogs for US$25
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Following trends is not He Hongzhang's style. From his days as a college tutor to his life today as an investor and the operator of an economy hotel chain, he prefers to differentiate himself from everyone else.

As founder and chief executive officer of Top Star Hotel Management Group, set up in September 2005, He has created a buzz in China's economy hotel market by coming up with a new concept.

As its name, "feeling hotel" or "fotel" implies, all Top Star hotels, besides offering bed and breakfast, are trying to appeal to business travellers' inner desire to be cared for and appreciated by providing such facilities and services as a "think garden," a theme blog, a Scandinavian-style interior design that's simple and trendy, a separate glass-window shower room and in-room massages.

"It is a way to distinguish us from the other economy hotel chains," He said.

The economy hotel chains market is relatively new in China. The first real budget hotel chain was Jinjiang Inn, which opened its first hotel in Shanghai in 1996. Since then, Home Inn and Motel 168 have joined the fray among the domestic companies.

Jinjiang currently has 139 inns. Set up in 2002, Home Inn has 163 now but expects to have 350 to 400 by 2008.

The major players so far among the international companies are Super 8 from the United States, with 96 projects in 54 Chinese cities, with 26 inns already opened, and Ibis, a brand licensed to Accor of France, which has three inns in China currently but whose stated goal is 50 by 2010. Both opened their first inns in China in 2004.

With the Olympics coming to Beijing in 2008, industry analysts say it is the budget chains and hotels not the four- and five-star ones that will get the most business and make the most profit.

Small wonder, then, that this industry is really starting to heat up.

Super 8 says it plans to have 68 at the end of this year.

It is against this backdrop that Top Star and He are starting their "fotels."

Top Star's idea

The "think gardens" will be located on the first floor of each hotel, He said, and each will cover more than 50 square metres. It will be divided into three sections a reading corner, where best-selling books are available; an Internet section, where guests can surf the net as they like; and a movie section, where guests can watch the most popular movies using DVD players. All three activities will be free of charge.

Theme blogs are part two of the plan. Top Star will put up a hotel-related topic on www.blogcn.com, and the floor will be open for discussion by users who register on the website. One month later when the topic is closed, the 10 blogcn users whose posts get the most hits will get prizes such as a free stay in a Top Star hotel or a Top Star VIP membership.

Based on the blog responses, Top Star designers will be required to change interior designs twice a year. So far, more than 30,000 posts have been logged on the glassed shower "room" concept, for example. Each room, separate from the toilet, is cylindrical, with the walls made of glass.

That one-month blog discussion ends on Sunday. " When the activity is finished, we will carry out a re-design plan on our shower rooms after having studied all the stories," He said. "The redesign job will get done by the end of this year. The twice-a-year project is a long-term project. Our guests will be able to see changes because of their own input all the time."

He concedes that Top Star's room rate is a little higher, which is about 200 to 300 yuan (US$25.32-37.97) in major cities, and 150 to 200 yuan (US$18.99-25.32) in secondary cities.

Reaction to the Top Star concept has been mixed. At least one industry analyst supports the effort to bring up something new.

"It is really difficult to stand out against such increasingly heated competition when you provide the same services as the others do: bed and breakfast at a cheap rate. Top Star's ideas are refreshing and will be appreciated, as long as the extra cost is reasonable," said Li Xinjian, professor in the School of Tourism Management at Beijing International Studies University.

Not surprisingly, competitors are not impressed.

"Super 8 welcomes healthy competition, but I do not think there is something unique with it," said Karl Eislen, marketing director with Super 8 Hotels China Co Ltd.

"The economy hotel business is not only about the supply of hardware but also quality service."

Pang Jingcheng, director manager with Home Inn, said: "Bed and breakfast are enough for businessmen. You cannot expect them to spend their spare time reading or entertaining themselves in the hotel."

Li said of the shower room idea: "It's funny and trendy, the youth should like it, and I think it could improve business."

Catching up

If Top Star is going to be a major force in the budget hotel industry, it will have much ground to make up. Since the first hotel was set up this June in Nanning, the company says it now has 17 hotel projects going. By the end of the year, the chain is expected to expand its number of hotels to 21 with an total investment of 200 million yuan (US$25 million). Its goal is to have 200 hotels in the Asia-Pacific region, with 120 around China, by the end of 2009.

"We will not consider initial public offering within five years," He said. "Money isn't a problem; branding is the top priority."

So far, He says the average occupancy rate of 74.6 per cent at the Nanning hotel is encouraging, considering his expectation of about 60 per cent.

He says major cities, secondary cities in East and South China, and scenic cities, such as Lijiang in Southwest China's Yunnan Province, are all perfect locations.

Last month, Top Star relocated its headquarters from Shenzhen to Shanghai. Last year, 5.7 million foreign and 80 million domestic travellers came to Shanghai. This year, Shanghai expects to attract 6 million foreigners and 95 million domestic tourists.

"Shanghai is a place where many international companies assemble, and we expect to be closer to customers and partners," He said.

Chen Xueye, a spokesman for the Shanghai Tourist Industry Management Committee, added: "Shanghai's position as an economic hub and the 2010 World Exposition will create huge opportunities for hospitality."

In business as in war, the wisest advice is to "know your enemy." He, for one, takes the adage seriously. And why not? Top Star is, after all, the newcomer in the neighbourhood.

"We only take Ibis as our direct competitor," He said. "Whenever I go to Tianjin or Chengdu, I stay with Ibis. I study them and try to learn from them, but not blindly follow."

Source: China Daily


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