Recently，InterContinental Hotels (NYSE: IHG) announced that it has opened more than 400 hotels in Greater China，Jolyon Bulley, CEO of the company’s Greater China region, revealed in an interview with a Blue Whale Sankei reporter，In the future, we will target opportunities in second- and third-tier cities，Combined with franchising and other models，Focus on the development of mid-range hotels in second, third and fourth tier cities。

Previously，Hilton (NYSE: HLT)、International hotel groups such as Marriott (NYSE: MAR) are also constantly trying to move to the second and third tiers，Even fourth-tier cities are sinking。It can be said，Developing towards non-first-tier cities，has become the choice and trend for international hotel groups to expand the Chinese market。

Industry insiders pointed out to Blue Whale Sankei reporters，The market layout of international hotel groups such as InterContinental in first-tier cities has basically taken shape，There are more opportunities for customer sources in second and third tier cities，But more detailed requirements will also be put forward for the positioning of the hotel after it sinks。

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“We adhere to our long-term commitment to China，And accelerate growth in China。Greater China has become the second largest market in the world for InterContinental Hotels Group。" Zhou Zhuoling told Blue Whale Sankei reporter。According to data provided by Intercontinental，From 2017 to present，InterContinental Hotels has 100 hotels 188bet app download opened in Greater China，The total number reaches 400。

To maintain the growth trend of the Chinese market，InterContinental Hotels continues to open franchise brands to the Chinese market。Intercontinental said frankly，The franchise model is intended to be in addition to the entrusted management model，Provide Chinese owners with more flexible business options。

As understood，Currently, the number of signed Holiday Inn Express hotels using the franchise model has reached more than 140，Among them，Nearly 30 stores have opened;Crown Plaza Hotel and Holiday Inn Hotel also continue to expand under the franchise model，There have been 7 newly signed hotel projects adopting the franchise model in 2018。

InterContinental Hotels has entered the Chinese market since 1984，Always adopt the entrusted management model，Until 2016，Only some brands are allowed to use the franchise model in the Chinese market。Different from entrusted management，Franchising is the right to use the brands of Intercontinental Export，And the corresponding intellectual property rights behind the brand，All are licensed to hotel owners for use，The owner needs to build his own team or hire a third-party management company team to operate the hotel。Intercontinental has no management team，In other words，People involved in the daily operations of the hotel、财、Object，All are controlled by the owner。

It’s worth noting，Hilton、Marriott、International hotel groups such as AccorHotels have already opened up the franchise model in the Chinese market。To seize the market，Intercontinental proposes the concept of “franchise +”，That is, the candidate for hotel general manager appointed by InterContinental Hotels Group，At the same time，The assignee will also be responsible for the training of hotel owners。

Zhou Zhuoling revealed to Blue Whale Sankei reporter，Intercontinental’s franchise model is very successful in the United States，The group intends to copy this model to the Chinese market。To this，An unnamed tourism industry analyst told a Blue Whale Sankei reporter，In recent years，International hotel groups that entered China earlier are facing contract expiration，There may still be a fate 188bet app download of being "changed"。The franchise model has become a new trend for many international hotel groups to explore China’s second and third tier markets，But it also faces the risk of damage to brand reputation caused by the owner’s unprofessionalism。

Are international hotel groups suitable for third-tier cities?

With the blessing of franchise model，Intercontinental’s layout in second- and third-tier cities has been accelerating in the past two years。Zhou Zhuoling revealed to Blue Whale Sankei reporter，InterContinental via Holiday Inn、Holiday Inn Express continues to penetrate into the Chinese market，In addition to these two brands，The focus of the overall development of Intercontinental will also be second, third and fourth tier cities。

The above-mentioned industry insiders’ analysis by Blue Whale Sankei reporters，House prices in second- and third-tier cities are relatively stable，Large value-added space，Correspondingly，It is also easier for international hotel brands to seek loans in second- and third-tier cities，This has allowed foreign-funded five-star hotels to focus on non-first-tier cities。

But after international hotel brands announced their plans to sink the market，We are also faced with whether third-tier cities really need so many high-star hotels，As well as practical issues such as whether the five-star hotel project will be reduced to a capital tool。

According to analysis by Zhao Huanyan, chief knowledge officer of Huamei Hotel Consulting Agency，The static payback period of high-star hotels in major tourist cities across the country is: Sanya 7.75 years、Shanghai 11.22 years、Lanzhou 15.97 years、Fuzhou 18.42 years and 20 years in Xiamen。

As a non-first-tier city，Sanya、Lanzhou and others are ranked high。Intercontinental staff also told Blue Whale Sankei reporters，The West is one of the fastest growing regions in the continent，Including Chengdu、Chongqing、Lanzhou、Guiyang、Guilin, etc.。

“Driven by the ‘One Belt, One Road’ initiative and a series of national policies to develop cultural tourism，Provinces and cities in western China are accelerating the urbanization process and continuously upgrading 188bet online sports betting and improving transportation facilities，Economy、Business and high-tech industries have developed，Promoted the development of leisure and business tourism in the western region”，Zhou Zhuoling said。

As understood，This time InterContinental is sinking in third- and fourth-tier cities，Mainly develop mid-range hotels。“Our growth engine in the future will be mid-range hotel brands。" Zhou Zhuoling said，“Our Holiday Inn Express is the fastest growing brand in China，There are now a total of 117 hotels under this brand that have been opened，Nearly 200 more are under preparation。So，In the mid-range hotel brand market，We are very successful。Both Holiday Inn and Holiday Inn Express are very well-known in China，This will be conducive to the further development of Intercontinental in China。”

Feng Shaohui, co-founder of Hotel Property Rights Network, believes，The development of international hotel groups in third- and fourth-tier cities，More reasons for，First- and second-tier cities lack incremental markets for the quantitative development of international hotels，For international hotels，三、More opportunities in fourth-tier cities lie in the demand for brands by real estate companies。

The expansion trend of mid-range assets and light assets, closely related to local hotels

In the trend of expanding mainly mid-range hotels to third- and fourth-tier cities，I have to mention AccorHotels Group, which holds shares with Huazhu。After holding hands and living in China，Accor will hand over the Ibis brand to Huazhu for custody。Data display，Under the operation of Huazhu，Ibis achieves rapid growth。As of the end of 2018，The number of ibis hotels in China exceeds 150。

In addition，Another international hotel giant, Hyatt, chose to cooperate with BTG Homeinns，Establishment of joint venture company，Develop the hotel stock market，Also targeting the mid-to-high-end market。

Number of mid-range hotel rooms from 2013 to 2018

Facing competitors, they frequently join forces with local companies，Zhou Zhuoling has not commented，He said，InterContinental Hotels Group has its own choice，That is, to develop the Intercontinental brand through organic growth。

188bet app download But，It is not only the above-mentioned international hotel giants that compete with Intercontinental，Also Huazhu Hotel Group (NASDAQ: HTHT)、Jinjiang Hotel(02006.HK)、Boutique Hotel(600258.SH) and other local hotel giants。

Blue Whale Sankei reporter noticed，Boutique Hotel has invested heavily in its Home Inns in recent years、Motel、Xinyan and other major economic brands undergo transformation and upgrading，and launch young、Personalized mid-range brand Yunik Hotel;Huazhu has gradually expanded its mid-to-high-end categories in recent years，Completed the strategic acquisition of the domestic boutique resort hotel brand Huajiantang in August 2018，Intended to enrich the layout of mid- to high-end industries;Plateno Hotel Group owns Xi'an、Lavande Hotel、James Coffetel and many other boutique hotel brands。

Feng Shaohui’s analysis to Blue Whale Sankei reporter，Local hotel groups have relatively deep roots in third- and fourth-tier cities，It is also easier to expand channels、Upgrade existing hotels。Compared with local hotels，Intercontinental、Hilton and other international hotel groups lack flexible customer acquisition channels。If the two are based on management level、Service quality comparison，International hotel brands still have the upper hand due to their perfection。

From the owner’s perspective，Based on data provided by Intercontinental，21% of its owners in China are old owners who have cooperated with them many times，Contributes 42% of InterContinental’s existing and under-construction hotel properties。Take Zhuhai Yanlord InterContinental Hotel as an example，The owner, Singapore Yanlord Land Group Co., Ltd. (hereinafter referred to as "Yanlord Group"), has cooperated with Intercontinental on multiple projects including the Yanlord Crowne Plaza Sanya Haitang Bay Resort。

Feng Shaohui said，Compared with local hotels，International hotel groups are more favored by overseas owners。But in the long run，International hotel groups’ exploration of the Chinese market is gradually overlapping with local hotel brands。In the context of the continuous development of local hotel brands，188bet app download The market competition of domestic hotels will also continue to intensify，And Intercontinental、Hilton doesn’t need more money，More new attempts in line with changes in the Chinese market。

*Source of this article: Blue Whale Finance, author of this article: Li Danyu, original title: "Intercontinental、Hilton、Marriott deploys in second and third tier cities，How high-star hotels compete with local hotels》.