By Liang Rui

The rapid warm-up of budget hotels cannot realize without the stable recovery of the economy, however, they make efforts to seek "opportunities" in the "crisis". The reason why they can enter the fast lane again in the fierce hotel competition is thought-provoking.

Lately, the budget hotel industry is lively. Recently, the financial statement of this second quarter released by Home Inn has shown that the turnover has increased 43.3 percent year on year amounting RMB 640 million yuan with the net profit of over RMB 100 million yuan. Another budget hotel Hanting Inns & Hotels announced that 300 new hotels will be set up in 2010, which equals to the total number of the newly added hotels of it in the past three years. Such budget hotels as Jinjiang Inn and Green Tree Inns have also publicized their plans to open new hotels successively, which shows that the budget hotels are recovering rapidly on the whole.

But, in the past six or more months, the overall industry has suffered from great challenges. The first challenge is excessively rapid expansion and soaring cost. The budget hotel industry has witnessed three-year rapid development with the hotel number jumping from around 1,000 in 2006 to over 3,000 by the end of 2008. And the speedy expansion has also lifted the house rental, leading to the rapid slip of ROI (return on investment). The other one is decreased client number and declined income. In 2008, the global financial crisis broke out, and the hotel industry as a reflection window of business activity is unavoidable to be affected. The pressure from both increased cost and decreased demand made the whole industry gloomy. In the face of challenges, all budget hotels have taken measures successively to improve the market share, and took the lead in walking out of the bottom finally.

The first action is to hold client source. The key to make budget hotels survive and develop is to maintain a higher occupation rate. Such chain brands as Home Inn, Jinjiang Inn, Hanting Inns & Hotels and 7 Days Inn, have establish comparatively consummate information system, and clients can have a real-time inquiry and reservation of rooms via Internet, telephones and short messages. Home Inn has also set up a giant client call center, and only by call can a client know such information as location and room circumstance of the Home Inn nearest to his/her business site. Many budget hotels have also had a close cooperation with such travel websites as www.ctrip.com and www.elong.com, by which, the information channels can be interfaced and bound with these websites, and FITs (Foreign Independent Tourists) can be gathered via these channels.

In addition to focusing on FITs, budget hotels have also aimed to enterprises' team clients and returned customers. Jinjing Inn has launched enterprise-typed client reservation, and any enterprise with the registered capital of over RMB800, 000 yuan can negotiate with Jinjing Inn on long-term services. Such a move is helpful for enterprises to save business cost, and has attracted lots of long-term team orders. 7 Days Inn has made efforts on elevating member users' loyalty. They launched an online virtual community named "Happy seven days". The content are not only the online game "the Happy Inn" virtually operated by the hotel, but also the assistance tools related to travels, such as weather forecast, map, urban life assistance, which will make users have a further experience and attract returned clients.

The second is to conduct dislocation competition. Impacted by the global financial crisis, sales discount and promotion are common acts in part of four or five-star hotels with declined occupation rate, and the price of some of their rooms is close to the one of budget hotels, which makes the budget hotels in the first-tier cities have a rather difficult operation. Such budget hotels as Home Inn and Jinjiang Inn have implemented market expansion long before, allocating many networks in the second and third-tier cities and conducting spacious dislocation competition with numerous four or five-star hotels in first-tier cities. Although the performance of their sub-branches in the first-tier cities is unsatisfactory, the sub-branches in the second and third-tier cities have gained favorable profit.

The third is to segment markets. During the development, budget hotels have also made a further division towards their client groups and expanded the client coverage. In the end of December, 2008, Home Inn launched its sub-branch "H Hotel". As a newly developed hotel brand by Home Inn, H Hotel is featured with vogue, comfort, elegance and well-equipped commercial functions, which are also provided by foreign commercial-typed hotels. It mainly serves for mid-and-top end businessmen, travelers and foreigners, seeking for a share from those four or five-star hotels.

Jinjiang Inn chose to stretch downwards and launched its sub-brand "Bestay Hotel Express" in the first half of this year, pricing the room around RMB100 yuan.  "Bestay Hotel Express" mainly aims at students and independent travelers, which are popular with low-end consumption groups due to its low price and relatively more independent room environment than youth hotels despite its simpler hardware equipment than common budget hotels.

Along with the continuous launch of these segmented brands, the target client groups of budget hotels have been expanded from common commercial clients to students, travelers and mid-and-top businessmen. The famous budget hotels are playing an active role in integrating market resource by means of brand influence and background backup system, such as developing franchise stores and incorporating star-ranked hotels, so the development stamina will take on increasingly.

The fourth is to have traits. The hotel industry is a pure service industry, whether the service is differentiated with others and the quality is complied with the standard or not often determines clients' consumption option. In order to attract clients, the former stiff image that all sub-branch budget hotels followed the same pattern has been altered. Hanting Inns & Hotels opened Hanting Inn on Bao Shi Er Lu beside the Westlake in Hangzhou, which takes cartoon pictures as the theme. The frescos and indoor decoration of the whole inn are ornamented by cartoon pictures. Although the rooms are small and not provided with slippers, toothpastes, toothbrushes, soaps, towels like traditional hotels do, various cartoon fans are attracted in flock and the inn has always been keeping a high occupation rate since its open.

With a trait, a hotel will gain clients' favor with more attention and its operation will become thriving naturally. "Trait" has become another business card of budget hotels to attract clients.