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Source | industrial technology

In the chain hotel market, beautiful and intelligent business stories are the most jumping.

With the aura of "King of Small Towns", Digital Wisdom, under the leadership of its founder Ma, has expanded in the sinking market for more than ten years through budget hotels such as Shangkeyou series, and has included small and medium-sized cities in the third, fourth and fifth tier cities. From scratch, Shangmei Digital Intelligence has owned 6,000 hotels, and became the fifth hotel group in China with the first sinking market in 20021year.

Nowadays, the low-line and low-allocation expansion is weak, and the expansion anxiety is overwhelming. Shangmei Digital Intelligence has begun to shift its strategic vision from low-tier cities to first-and second-tier cities, and its product strategy has also tilted from low-end to high-end. In the gap of strategic adjustment, it is necessary to tell the story of growth for capital at all times.

In storytelling, the horse who often plays with capital is definitely a master. Two years ago, he wrote in Growth Code or Capital Code? The article mentioned that "capital is very picky about food and needs to see growth, and it is an extraordinary rapid growth; It needs to see the future, preferably an unimaginable future. "

For the hotel track, there are many participants, and the supply of standardized and non-standardized services is sufficient. It's hard to talk about growth. But in the horse's view, this is not a problem at all. He believes that Shangmei has basically found a fast-growing password and found a way to increase 3,000 to 5,000 hotels every year while ensuring quality.

The fact is that while finding the growth password, Ma's plan of ten thousand stores shouted five years ago has not been realized, and Life Insurance (the predecessor of digital intelligence) has to give investors a step down. Subsequently, in order to create momentum for growth, Ma successively imagined the intelligence of Shangmei, including intelligent transformation, innovation of joining mode, and mid-to-high-end breakthroughs.

Judging from the business changes of Shangmei Mathematical Intelligence, it is more and more like the prototype of a business story with optimistic capital. Horses with big mouths frequently stand in front of the stage to endorse the growth potential of beauty and intelligence. After Wandian went bankrupt for five years, Ma Yao Ying quickly shouted the slogan of opening 30,000 stores in 2030. However, at present, the number of digital smart hotels in Shangmei has not exceeded 1 10,000.

Just as the United States seeks growth, stocks are hard to keep. Both the head hotel brand and OTA platform seize the space of hotel branding and chain in the market, and the industry enters the stock game, and the cost-effective advantage of being beautiful and intelligent is minimal.

The fierce battle to sink the market is not over yet. In order to get rid of the shackles of low prices and realize the price-for-quantity exchange, Shangmei Digital Intelligence stood on the field in a defensive posture, sprinted to the high end to make a high premium, and made many attempts for young people, and cooperated with IP such as Tencent E-sports to build theme hotels and incubate service brands such as coffee, baking and bookstores.

But there are parity genes in the bones, which are labeled as low-end and mid-end in consumers' cognition. Shangmei digital intelligence is not dominant in the high-end market, and it is difficult to convince high-net-worth individuals to pay the bill. The sense of crisis and uncertainty are getting bigger at the same time, and it will take time to test the story of the big ship turning around.

In this regard, Ma does not agree with the statement. He compares BYD and Anta to beauty and intelligence, and firmly believes that beauty and intelligence that pay attention to cost performance and low price can become famous by cost performance like BYD and Anta, and eventually lead the world.

Ma Yao Ying, who is used to making lists and plans, has made two big plans for Shangmei's mathematical intelligence this year. One is global expansion, looking for opportunities in Africa; The other is to seek listing and catch up with other listed top hotel groups. According to reports, when talking about going to sea, Ma Yao Ying said, "Private enterprises like Shangmei can only go to Africa to do some hard work and export some China culture to the African people."

Long-term concerns and close worries are superimposed, and beauty and wisdom are still in the dream.

Sinking crisis

Just as Shangmei Digital Intelligence tried to March from low-tier cities to first-and second-tier cities, major hotel groups also organized groups to penetrate into the sinking market and went straight to the hinterland of Shangmei Digital Intelligence.

Before the outbreak of COVID-19, domestic tourism and hotel industry developed rapidly, and leading hotel groups such as Jinjiang, Zhu Hua and BTG expanded rapidly through light asset model and brand transformation. During this period, a large number of economical hotel chain groups emerged, among which Shangmei Mathematical Intelligence, which started from the sinking market, was the best.

In the early days of its establishment, the strategy of "encircling cities from rural areas" achieved remarkable results. In 20 10, its first shangkeyou express hotel was born, focusing on the brand positioning of "third-and fourth-tier cities, 40-60 rooms, small and beautiful". Five years later, the number of stores in Shangkeyou Hotel exceeded 1000, making it one of the few brands in the industry to reach the scale of 1,000 stores in five years.

After several rounds of horse racing, Shangmei Digital Intelligence has made great achievements in scale. In the ranking of "Top 225 Global Hotel Groups" in 20021year, the number of rooms ranked first 12, and the number of stores ranked first 10, second only to local brands such as Jinjiang, Zhu Hua, BTG and Green.

Due to its high market share in the sinking market, Shangmei Digital Intelligence is also known as the "king of sinking". After the development of 10 years, Shangmei Digital Intelligence currently has 29 brands, with stores covering 1686 districts and counties in more than 324 cities, 100% in third-and fourth-tier cities and 90% in fifth-tier cities.

Although there are many honors, there have been internal and external concerns about Shangmei's mathematical intelligence. The scale expansion is too fast, and it is difficult to give consideration to service quality and user reputation; In the golden age of budget hotels, the sinking market of the third and fourth lines, which is proud of its beauty and intelligence, has risen, and hotel giants at home and abroad regard it as a battlefield for investing in "real money".

In the third quarter of last year, more than half of the newly signed hotels in China Hotel came from the sinking market. Seven-day hotels owned by Jinjiang Hotel (China District) account for more than 50.3% of the store's sinking market, and more than 64% of newly signed hotels come from the sinking market, which makes the company face the attack of giants.

In order to improve profitability, Shangmei Digital Intelligence gradually upgraded its economic products, trying to raise barriers by upgrading its intelligence and increasing consumption scenarios. Last year, Shangmei Digital Intelligence upgraded the economic hotel brand Shangkeyou, and launched Shangkeyou U6, which changed the main color of the brand to vermilion with national style, built the cultural wall of the town, and equipped with super bedding and intelligent guest control. It is understood that Shangkeyou U6 can realize a single room investment of 450,000-50,000 yuan, and the house price is 150- 180 yuan.

202 1 12, Shangmei Digital Intelligence won the strategic investment of Hanxing Venture Capital Co., Ltd., a subsidiary of Xiaomi, and will deploy intelligent hardware products in Sunken Hotel to realize "intelligent and high-end upgrade". For low-end hotel consumers, general intelligent functions, including smart door locks, intelligent curtain and smart speakers, are not really needed, but more like a gimmick than actual functions. They pay more attention to the parity characteristics of economic chain hotels and are more sensitive to the price changes after intelligent transformation.

In addition to intelligent transformation, Shangmei Digital Intelligence also changed its expansion mode to enhance brand penetration and influence, thus achieving a breakthrough in hotel scale. In September, 20021year, Shangmei Digital Intelligence released the plan of "New Chain, Lighting Brand", which provided investors with the experience of chain development and system capability, and proposed that investors * * * share capital, * * take risks and * * * enjoy benefits.

Insiders said that the idea of changing the franchise model is beautiful and realistic. The hotel penetration rate in third-and fourth-tier cities is easy to be saturated, and there are many alternatives for consumers to choose. Newly opened hotels still have a long way to go in terms of income. "It is nothing more than using a new model to pull more people into the game and do the amount to gain the recognition of capital."

With regard to the goal of opening a shop that is still beautiful and intelligent, Ma Yao Ying can describe it as frequent dreaming and hitting his face.

20 16 12, Shangmei Life Insurance Group announced the completion of1400,000 RMB Series B financing. At that time, the strategic plan of "opening a store in five years" was put forward, aiming at anchoring the largest limited service hotel group in China. However, five years later, the Wandian plan fell through.

On June+10, 2020, at the "Brand Reconstruction Breaking Winter | 2020 Sunken Market Vitality Conference" held by Life Insurance Group, Ma talked about the future goal of Life Insurance 10, and announced the plan of 50,000 stores around the world in a high-profile way.

The confidence of these 50 thousand stores comes from the sinking market. Ma Yao Ying's vision is to open five stores in a county and 65,438+00 stores in a district. Ten years later, there will be 50,000 stores in the world, making them the top five in the hotel industry.

A year later, Ma shouted out Yao Ying's new goal again. He hopes that in the next decade, new chains will be combined with light brands, and together with industry partners, 30,000 stores will be opened, 1 1,000 wealthy families will be realized, 200 profitable start-ups will be cultivated, and 1 1,000 chain brands will be hatched.

Today, 10 has opened 30,000 stores, which is a slogan hanging in Shangmei Digital Intelligent Office Building. In Ma's view, although mathematical intelligence shouted a seemingly earth-shattering goal, he believed it could be achieved.

With what? Ma's answer is new chain and brand creation. Shangmei Digital Intelligence opens its membership, management, technology and supply chain capabilities, authorizes the establishment and operation of cooperative brands, and then the cooperative brands pay the fees to Shangmei Digital Intelligence. Ma Yao Ying predicted that by 2023, 50 brands will cooperate with Shangmei, and by 2030, there will be more than 65,438,000 brands. Each brand will open 20 hotels every year, and the goal of 30,000 hotels can be achieved.

I have to say that Ma Yaoying really understands the logic of capital and the business stories that capital wants to hear.

High-end obstacle

Shangmei Digital Intelligence has extended its reach to high-tier cities, and the layout of high-end brands is also constantly advancing. On the one hand, it will distract the attention of Shangmei's digital intelligence and get tired of dealing with the competition in the sinking market. On the other hand, the middle and high end is an area that Shangmei is not good at. For the sake of multi-brand strategy, the growth of store scale and the promotion of customer unit price, the risk can not be ignored.

Since the outbreak of the COVID-19 epidemic in 2020, the tourism industry chain has been hit, and the hotel industry has fallen into oversupply and continued to clear out. Chain brands such as Home Inns, Hanting and 7 Days, which occupy the main market share, still have room to move, while other low-end budget hotels have limited room for room rate increase and rapid cost increase, which seriously devours the net profit of chain hotels and squeezes the profit space. This problem is particularly prominent in the large and scattered sinking market, and reducing costs and increasing efficiency has become the main theme.

In order to break the sinking market, Shangmei Digital Intelligence seeks the increment of high-end hotel brands. By splitting into seven companies, the original four business divisions were upgraded to independent companies, creating a brand matrix integrating Accor Ruixiang, Liuxiang Commercial, Whale Xi Wenlv and Shangkeyou Hotel, providing consumers with low-end hotel brands.

Under the background of consumption upgrading, young people's demand for the quality, service ability and personalized and experiential consumption of high-end hotel products has increased. The traditional economical hotel products, which are still mainly beautiful and intelligent, can't meet the growing new consumption demand, and they have entered a round of "elimination", and high-end hotels have become another blue ocean market for accommodation.

The seemingly glamorous mid-to high-end hotels have entered the stage of "fairy fights". In addition to pursuing beauty and intelligence, leading hotel chains such as Home Inns, Zhu Hua and Jinjiang, emerging chain brands such as Atour, and OTA platforms such as Ctrip, Meituan and Tongcheng have set their sights on mid-to-high-end hotels, added more urban tourism gathering areas and urban business districts, and tried their best to please the "rich and picky" Z generation.

There are two main high-end routes that focus on beauty and intelligence. One is to focus on the sinking market of high-end hotels, and the other is to directly kill one or two cities to seize the high-end market. In 2022, Shangmei Digital Intelligence will promote the development of high-end hotel brands as a strategic deployment. In addition to its own high-end brands, such as Lan Ou series and Shangkeyou products, it will also explore the high-end market in conjunction with international high-end hotel brands.

Last July, Shangmei became the exclusive strategic partner of Accor Ruixiang, a high-end brand of Accor Group, in China, responsible for the development, preparation, operation and management of Accor Ruixiang brand in China market. Accor Ruixiang's first store in Qingdao plans to open more than 400 Accor Ruixiang intelligent technology hotels in the future, focusing on expanding the tourism market in second-and third-tier cities.

Compared with competitors, it lacks high-end genes, and its product strength, vitality and market competitiveness in the high-end market are in doubt. Jinjiang group, backed by Shanghai state-owned assets, has better financing ability; Vienna International, Jinjiang Star, 7-day series and other brands have rich matrices; China residence has a comprehensive layout from economy to high-end, and its brand is sticky; Junting cultivates high-end hotels in the Yangtze River Delta region; Atour has launched a number of cross-border IPS such as Atour Basketball Hotel and Atour Netease Cloud Music Hotel.

In order to cooperate with international mature high-end brands, Ma Yao Ying's outspoken attitude helps to strengthen the high-end genes of Shangmei. He said that to be a high-end hotel, it is necessary to accumulate long-term experience in product design, construction and service management, and Shangmei hopes to learn from the experience of mature brands.

Although it started as a budget hotel, Ma is full of confidence in being a luxury hotel. His methodology is to provide 300% experience beyond the foundation at three or five points that consumers are more interested in through the empowerment of technology, and accurately control costs in places that consumers can't see but consumers feel perfect.

However, the external environment is not as ideal as Ma thought. The competition of high-end hotel brands is more intense and tends to be saturated in first-and second-tier cities. According to the statistics of Maidian Research Institute, among the first-tier cities, there are more than 700 high-end hotels in Beijing and Shanghai, and more than 400 high-end hotels in Shenzhen and Guangzhou. The first two mainly rely on stock turnover, and there is still room for the latter two. Among the tourist hotspots, the number of high-end hotels is 787 in Chengdu, 684 in Hangzhou, 242 in Sanya and 0/96 in Xiamen. The overall number is still amazing, and some regional holiday products are saturated.

In addition to the fog of the high-end route, Shangmei Intelligent's light asset expansion route has also been criticized. Last year, Shangmei Digital Intelligence upgraded its brand from a single hotel brand to a hotel brand+industry intelligent platform company, which means that Shangmei Digital Intelligence took the imagination of model expansion to the extreme and attracted capital through the concept of * * * architecture * *.

Although the story is beautiful, the landing effect is doubtful. Ma Yao Ying's vision of respecting beauty and wisdom is to help more than100,000 or 200,000 small hotels in the market that live at the breakeven point sink, so that they can become famous and operate more effectively, and everyone can stay in a good hotel in any town.

Judging from the expansion results, it faces many obstacles, among which the standardization of the sinking market is the most difficult obstacle to overcome. Shangmei Digital Intelligence hopes to earn service fees with the help of franchise policies, which is also considered by the market as an act suspected of harvesting and sinking the market.

At the same time of the expansion of Shangmei Digital Intelligence, Shangmei Digital Intelligence also went to court with its partners, and there were frequent cases of franchise contract disputes. Most of Shangmei Digital Intelligence are plaintiffs, and some franchisees started to operate without passing the acceptance of Shangmei Digital Intelligence, which constitutes a fundamental breach of contract. In addition to the liability for breach of contract, Shangmei Digital Intelligence also has the right to collect trademark license fees. To sum up, in some cases, the penalty is as high as 300 thousand, and the rules are mainly determined by beauty and wisdom.

By the end of 20021,Shangmei Digital Intelligence had more than 5,800 hotels and 3,979 stores. If we want to achieve the goal of 30,000 hotels, the number of new stores will be close to 3,000 every year. This year, Ma Yao Ying shouted "800 new hotels will be opened in 2023".

Judging from the current growth rate, this is obviously far from the target, but Ma explained that the future hotel scale growth of Shangmei must not be linear growth, but exponential growth.

Are you really not afraid of falling when you are always yelling at the target?