What does a hotel have to look like in order to continue to grow in the market?
Monomer hotels have the survival rules of monomer hotels, chain hotels want to blossom throughout the country, it must meet the current mainstream consumer trend changes, in line with the preferences of mainstream consumer groups.
The current mainstream consumer groups have a deeper understanding of the world, they have a positive and sunny attitude, are willing to exercise and are more pursuing the concept of sustainable development of life. This is in line with the popular outdoor, frisbee, fitness, and the pursuit of low-carbon and healthy life concepts in recent years.
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The changes in the consumption trend pointed by the current mainstream consumer groups also point out the direction for the development of hotels.
In the past three years, Orange Hotel, the mid-end hotel brand under Huazhu Group, has bucked the trend of growth. During the period from Q3 2020 to Q4 2022, Orange Hotel has an average quarterly growth rate of 7%, becoming one of the mid-end hotel brands under Huazhu Group with the fastest growth rate.
This year, Orange Hotel ushered in a new stage of development. In May, the first store of Orange Hotel version 3.0 – Orange Tianjin Xiaobailou Hotel was officially launched. In November, Orange Hotel 3.0 dropped two more in one south and one north – Orange Guangzhou Yuexiu Park Hotel and Orange Xi ‘an Semiconductor Industrial Park Hotel.
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Photo Description: Orange Hotel 3.0 Orange Guangzhou Yuexiu Park Hotel
Up to now, more than 100 Orange Hotel 3.0 products have been signed and started construction projects. The growth of Orange Hotel in the past three years, as well as the birth and rapid development of Orange Hotel 3.0, has proved that hotels that meet the changing consumer trends can achieve better growth in the present.
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Happy life in the sunshine and fresh
There is no doubt that the current mid-end hotel is the most competitive market segment in the domestic hotel industry. There are more than 800 mid-range hotel brands above a certain scale in China. International and local hotel groups are furiously “firing”, in recent years, not to launch a new mid-range hotel brand, or product upgrading. In such fierce competition, the homogenization of mid-end hotel products is becoming more and more serious.
Hotel brands want to get rid of this situation, the key is that the brand has enough clear recognition. As one of the earliest mid-end hotel brands in China, Orange Hotel has formed a unique memory point in the hearts of domestic consumers with its distinctive brand concept and unique design style from the very beginning.
After being acquired by Huazhu in 2017, Orange also continued the original brand concept, and constantly refined products on this basis, launched Orange Hotel 2.0 version in 2019, and launched the latest 3.0 version in 2023.
The Orange Hotel was originally inspired by Orange County, California, where the local lifestyle is filled with a relaxed and healthy California style. The Orange Hotel 2.0 California Sunshine Edition amplifies this. The 3.0 version of Orange Hotel retains the original health and vitality, and returns to the concept of “Lelive” itself, making it more refined and visible.
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Photo Description: Orange Hotel 3.0 Orange Guangzhou Yuexiu Park Hotel
The so-called “Lifestyle of Health and Sustainability” is a healthy and sustainable way of life. Orange Hotel hopes to return to the essence of “orange”, just like the orange itself gives people a healthy, vibrant and fresh feeling.
Yang Yaohui, CEO of Orange Hotel, believes that in today’s diversified mid-end hotel products, the core of Orange Hotel in the process of creating 3.0 products is to simplify the complexity and make the brand real, specifically, the operation of branding, brand productization, and product visualization.
Zhou Guangming, the chief designer of Orange Hotel 3.0 and the founder and creative director of Zhu Zhou Space Design, also said that compared with the pursuit of a stunning online red, Orange Hotel is more willing to create a long-term experience in three-dimensional space, and pay more attention to the feelings of guests from the overall and details.
The so-called brand productization can also be understood as the concept of presenting the brand with products, what you see is what you get. Orange Hotel hopes that the first thing users feel when entering the hotel is: Orange hotel does not have so much external style, it is light and simplified, and still focuses on the sunshine and fresh delivered by orange itself.
The Orange hotel also shows more sharpness in the visualization of 3.0 products. Taking the recently opened orange Guangzhou Yuexiu Park Hotel as an example, from the visual effect of the hotel, the color of the orange hotel is the three colors of the orange tree – coffee color, earth color trunk branches, green leaves, orange fruit.
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Picture: Orange Hotel 3.0 rooms
The main color of orange not only echoes with “orange”, showing vitality and vitality, but also coincides with the new generation of orange hotel “Le live” proposition. From the user’s perspective, what you see is what you get, and the experience is more direct and pure. This greatly reduces interpretation costs for both users and investors.
At the same time, Orange Hotel further pointed out that it is more necessary to consolidate the brand and deeply bind the brand with the comprehensive services provided by the hotel, so that consumers can also feel the value information with brand characteristics in the living experience.
As for the specific service experience, Orange Hotel presents and highlights the key points through the classification of happy food, happy living and happy travel. From the perspective of “happy food” : in the past, the breakfast of Orange Hotel was favored by customers with richness, but now Orange Hotel is classified by three functional areas: carbohydrate happiness area, bread and coffee area, and low-fat health area; Refocus on the creation of single products, such as orange beef noodles in the carbohydrate happy area, COSTA customized “orange iron” coffee in the bread coffee area, and the low-fat health area provides salads and fresh whole fruits, a dozen kinds of cereal oats/nuts/dried fruits, so that the healthy and sustainable orange in the breakfast experience more clear.
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Orange 3.0 Orange Guangzhou Yuexiu Park Hotel Restaurant
Nowadays, young people pay more attention to exercise and fitness, even if they travel, they also want to arrange time to go to fitness. Orange Guangzhou Yuexiu Park Hotel has moved TechnoGym, a high standard in the field of fitness equipment, to the hotel’s fitness room to meet everyone’s fitness needs.
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Photo Description: Orange Hotel 3.0 Orange Guangzhou Yuexiu Park Hotel jogging room
From the market feedback, Orange Hotel 3.0 through the accurate positioning of “Le Live”, while meeting the needs of owners and investors and the new generation of business travel consumption, while compatible with the mainstream leisure travel accommodation needs. While continuing the original brand DNA, Orange Hotel has also kept pace with The Times, making Orange more brand recognizable in the mid-end hotel market, but also more product power, competitiveness and cost-effective.
02
New Life at Orange Hotel
The development of Orange Hotel is not smooth sailing. At the beginning of its establishment, it followed the concept of “one store, one design”. Although this practice of excellence was recognized by the market at that time, it also sacrificed the possibility of large-scale replication. In the end, mid-end hotels are still relatively standardized products, and from a longer perspective, the essence of their competition is still ROI, and the investment model should have hardcore competitiveness.
In 2017, after Orange Hotel was acquired by Huazhu, thanks to the support of the Group, it has more guarantees in the design of business model, procurement operation, hotel operation, revenue control and even the systematic efficiency of organizational culture.
For example, in the investment stage of the hotel, the shared procurement service can ensure the quality and price control, but also can customize the desired materials for Orange Hotel. For example, the lighter and more environmentally friendly recycled materials used by Orange Hotel, as well as the simulated green plants needed for the procurement of Orange Hotel, are inseparable from the support of Huazhu supply chain.
In the process of the product, Orange hotel version 3.0 applied the OEM (foundry production) way, different from the past more on-site assembly, now the factory directly customized mass production, more cost-effective under the scale. It is revealed that Orange Hotel will launch the “pool total package” next year, from construction to procurement one-stop total package mode, franchisees entered the bag, and operational efficiency will be improved.
In the daily operation stage, the application of self-service mobile technology such as “robot” and “easy series” has improved the operation efficiency of the whole scene and enabled the investment and operation of the hotel in an all-round way. Huazhu’s direct booking platform for hotel members “Huazhu Club” has more than 200 million members, which will also provide a certain guarantee for the daily passenger flow of Orange Hotel.
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Systematic efficiency, followed by cost leadership. Orange Hotel 3.0 under the premise of more distinctive brand characteristics and greatly improved product power, the cost of a single room will not rise but fall.
It is reported that the current single room cost of Orange hotel (including public area) is 118,000 yuan. The first orange hotel 3.0 version of Orange Tianjin Xiaobao hotel opened in May this year, the average customer re-purchase rate reached 45%, RevPAR exceeded 400 yuan, and the new stores in Guangzhou and Xi ‘an continued to fill up within a week of opening.
The top management of Orange Hotel admitted that the return on investment of the hotel largely depends on the rent, and the return on investment of Orange hotel is generally 3.5-4 years in a relatively stable situation.
03
Hit thousands of stores
In recent years, China’s hotel industry has been divided in its judgment on the future development.
Ten years ago, China’s hotel industry brands or a hundred flowers bloom, and now China’s hotel industry market structure will be presented by the pyramid olive, the middle market prospects are unlimited.
But nearly a decade has passed, the imaginary olive structure has not arrived, and economy hotels still occupy the domestic hotel market. By the end of 2022, the room size of domestic economy hotels accounts for 60% of the overall market, and if you look at the number of stores, economy hotels account for 80% of the volume scale.
Yang Yaohui said that although from the data point of view, the scale of mid-end hotel chains in recent years is not growing faster than before, but the overall trend of upward development is still showing, and orange hotel has also achieved bucking the trend of growth in the past three years, how to grasp the opportunity in the complex environment is the key to the development of hotel brands.
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Yang Yaohui pointed out that there are many small changes in the hotel industry worth noting. He observed that the performance of business hotels in the mid-range hotel market was stable or slightly shrinking in the past two years, and the leisure business market had more advantages. Therefore, Orange Hotel will still increase the development of the traditional business market, but at the same time will actively expand the development of leisure business, tourism market.
In addition, Orange Hotel has also increased in the sinking market, as well as the blank market that has not been laid out before. In the blank market, Orange Hotel has not been laid out in the southwest, northwest and other regions, but these places are rich in tourism resources, and the shutdown of outbound tourism in the past three years has directly made the tourism industry in these regions develop rapidly. Since the beginning of this year, Orange Hotel has also signed many cooperation projects in the southwest and northwest regions. This also highlights from the side the scarcity of mid-end hotel brands in these markets, as well as the brand premium and appeal of Orange Hotel.
At the same time, mid-end hotel brands such as Orange Hotel with personalized labels are also popular in sinking markets. Considering that consumers in the sinking market also have a preference for mid-end brands, Huazhu also intends to increase the promotion of orange hotels in the sinking market in recent years.
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According to the report issued by Huatai Securities, the top consumer satisfaction from the Northeast region also validates the considerable potential of orange’s expansion in lower-tier cities. In addition, Orange Hotel has won the love of the Chaoshan area. The first store opened by Orange Hotel in Chaoshan has been the favorite of local customers, and the performance value of RevPAR is also very high. Now Orange Hotel has opened the fifth store in Chaoshan region.
Orange Hotel has opened more than 620 hotels, Orange 3.0 signed and started construction of more than 100. The immediate goal is to hit 1,000 stores. This means that Orange Hotel is expected to become the fourth mid-end hotel brand in China with a scale of 1,000 stores.
From the perspective of brand development track, the time for large-scale development of mid-end hotels is ripe, and hundreds of cities and thousands of stores are not far away from the industry. The goal of 1,000 stores from Orange Hotel also reflects its ambitions in the mid-range hotel sector. But more importantly, orange will be more universal, more sharp brand building, in order to meet consumer aesthetic, experience upgrade at the same time, in the middle market again tree benchmark, open up a second growth curve.
However, Yang Yaohui pointed out that no matter the size of the target, the most important thing is the stable quality and product output of the hotel, which will be the current and future development of Orange Hotel must adhere to.
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