Accommodation sector: internal circulation-led actions and expectations

Given the repeated outbreaks, tourists have shortened their travel distances, and the accommodation market tended to narrow with its operating income in general showing a low trend following a high one last year.

The challenges persist into 2022. A favorable turn would normally occur amidst the crisis as the pandemic still exists now. The accommodation sector should adhere to the bottom-line mode of thinking, allow for a sufficient margin of safety, think about the cycle and end, and firmly believe that demand for accommodation will always exist. We hope that new life will be brought to the tourism and accommodation industry in the new year.

Looking back at 2021 and looking forward to 2022, we can see that the accommodation sector has made achievements and seen expectations in the following areas.

- Looking for inner changes

Following a shift of the market orientation to the domestic market due to the outbreak in 2021, the tourist accommodation sector has been adhered to the international standards with a certain level of service quality maintained, and made efforts to launch services with Chinese characteristics. During the outbreak, the sector saw three important time nodes: first, it might use this special period to change consumers' perception of Chinese brands; second, it might use this special period to achieve supply-side reform and shift from imitation-based innovation to independent innovation; third, it might use this special period to acquire high-quality resources. During the special period, the tourist accommodation sector resumed its focus of development, especially some hotels as appendages to real estate that previously mainly relied on real estate but now resort to hotel operation and management and asset management to make a profit. Their development model has shifted its focus from heavy asset to light asset, and toward more lean management.

Faced with the development pattern oriented on internal circulation, the tourist accommodation sector has adjusted its development strategy and direction with the times. On the one hand, it has increased income and reduced expenditure, elevated efficiency, and improved its internal strength and ability to survive, so as to survive and tide over the crisis; on the other hand, it has updated the development concept, innovated the business model, explored new models, established new mechanisms, developed new products, sought changes with innovation, and improved competitiveness and quality.

The tourist accommodation sector has adapted to the changes by developing new business models such as the urban resort hotels like Puxuan Hotel, those oriented on health maintenance like Anadi Hotel, and the one-stop resort complexes centered on hotels such as Kaiyuan Senpo Resort Park and Mediterranean Club, as well as resort farms, health care hotels and hillside hotels, exploring new models such as hotel soft branding, shared accommodation, light chain hotels and vocations at different time, putting into practice new mechanisms such as mixed ownership and professional managers, exploring hotel space utilization and new product development by means of laboratories, introducing new materials, techniques and technology into hotel design, construction and renovation, and applying new ideas, new management models and digital technology to operation and management and daily services, so as to improve hardware and software levels and provide customers with a better experience. It is believed to be the unswerving direction for the tourist accommodation sector in 2022.

- Seeking common ground from the outside

Amidst the crisis, the industry based on internal circulation should avoid involution. To seek common ground from the outside, we should set up alliances, seek common points while reserve differences, collaborate with and empower each other, seek cultural identity, and form a community of shared interests against risks together.

The competition in the sector has been replaced with a combination of competition and collaboration. The upstream and downstream have worked together. Third-party hotel supply chain management platforms have emerged in addition to the internal collection and purchase platforms of large-scale hotel groups. Hotel supply chain committees have been set up, and hotel supply chain finance come into being. Some enterprises have broken through industrial boundaries by carrying out cross-field cooperation. Some others have tried to build an industrial ecology for the accommodation industry, and create a community of shared interests in the industry.

Competitive enterprises have formed alliances, enjoyed complementary advantages, empowered each other, and worked together with shared benefits.

In 2022, the accommodation sector will keep lifting internal strength and seeking internal changes, and further seek common ground externally, explore the sustainable development opportunities on the outside, expand the space for growth, and achieve development based on responsibilities.

- Utilizing capital

The tourist accommodation sector has been hoping for a new breakthrough in the capital market. With many initiatives, it has launched IPOs and issued REITs (real estate investment trusts), so as to optimize the allocation of resources, standardize corporate governance and enhance brand image, and also realize risk and benefit sharing on a larger scale. The listed companies in China's tourist accommodation sector saw a total market value of about 170 billion yuan at the end of 2021, only one-ninth of that in the United States and a decline from the previous year. The sector needs to further study and remove the bottlenecks for accommodation companies to go public and help them to obtain support in the capital market.

- Promoting brand culture

The hotel is essentially a cultural product, and a vehicle to carry, demonstrate and spread culture. Brand positioning is about how to tell a good story with culture, occupy consumers' minds with culture, and achieve cultural identity. The more distinctive the cultural characteristics are, the more the hotel will be recognized. International development requires the hotel to achieve professional operation and management up to the international standard, and also to highlight the Chinese service with Chinese cultural profoundness. By making the hotel reach the international standard, we will achieve cultural output and international recognition of the Chinese culture based on cultural confidence. We should make foreign consumers understand, identify with and accept our culture with the support of culture as part of the soft power.

Over the past year, people in the industry have realized that culture has certain potential energy like water flowing from high to low. Only when our culture becomes more competitive will it be possible to realize the flow from "East" to "West". At present, Jinjiang, Huazhu and CTS hotels have all been introduced into the developed countries and markets by means of mergers and acquisitions, and the international brands into China with no output of Chinese brands.

- Following the national strategy

The tourist accommodation sector has still followed the major national strategies despite the impact of the pandemic. First, under the "double carbon" framework, hotels should focus on both internal benefits and external effects, and should in particular reduce the negative external effects due to carbon emissions through low-carbon development. Second, the tourist accommodation sector will vigorously fulfill its social responsibility, pay attention to the needs of the disadvantaged and low-income groups, provide them with more jobs, develop more cost-effective accommodation products, and create hotels affordable for everyone. Third, the tourist accommodation sector will give full play to the role of rural guesthouses in promoting rural revitalization, and contribute to achieving common wealth by transferring payment of tourism. Fourth, some enterprises have tried to make plans along the "Belt and Road" before the outbreak, and will next build partnerships with member countries to the Regional Comprehensive Economic Partnership.

- Reshaping the ecology

Human resources are one of the dilemmas encountered by the tourist accommodation sector. The pandemic has significantly affected the income levels of employees in the accommodation sector. In the past decade or so, the accommodation and catering industries have occupied the bottom among all non-private enterprises in all industries in the urban area, which will further hinder the recovery of the accommodation industry that is already faced with the human resource| crisis.

Given the difficulties and crises, the ecology of the tourist accommodation sector is being reshaped with the help of capital, talent, culture and digital technology. The tourist accommodation sector will be further strengthened as the leading force, and large companies gain more opportunities for growth. The sector has seen surplus on the whole and mainly relied on stock for development, and will experience structural growth in the future. That in different regions, types of operation, grades and supply chain links still sees a room for structural growth. Demand itself is also the driving force behind the reshaping of the sector. The demand shift caused by the pandemic has forced supply-side innovation, consumer upgrades promoted supply-side innovation, and demand upgrades been stimulated by supply-side reforms. Strict national regulation on data security, intellectual property protection and anti-monopoly policies for platform companies have also helped build a new ecology featuring fair competition, collaboration, prosperity and health in the tourist accommodation sector. (Yang Honghao, China Tourism Academy)

Travel agency sector: full of innovation and expectations in 2022

With widespread vaccination and the development of new therapeutic drugs against COVID-19, the world expects the pandemic to disappear by the end of 2022. Travel agencies will, on the one hand, enhance their development capacity to ensure that they can "survive" as the pandemic becomes normal, and, on the other hand, will actively respond to the changes in consumer demand and market development brought about by the pandemic and prepare in advance for the new phase of full recovery of global tourism. Continuous innovation is an important tool for the future sustainable development of travel agencies.

Innovation should be strengthened mentally. The service concept and development concept of travel agencies should keep up with consumer demand and industry changes, and adapt to future development trends. The travel agency will not only be the provider of tourist routes, but also the creator of new ways of travel, the spreader of new concepts of life, and the leader in new mode of tourism consumption.

Innovation should be strengthened in terms of operation model. Based on the traditional business, travel agencies will explore more possibilities to enhance their risk resistance: explore a new travel business mode that combines "travel + life", "travel + retail", "travel + experience" and others; combine travel services with people's daily social and living needs to create new scenes of travel services; integrate the travel needs and daily shopping needs where they overlap to provide local living services and travel services not local for travelers; combine the types of operation oriented on immersive experience with travel information dissemination to make the outlets of a travel agency a new place for young people to experience the new modes of leisure and remote landscapes.

Innovation should be strengthened in terms of product. The innovation of products for travel agencies will focus on several directions: first, customized high-quality tourist products; second, high-frequency high-quality tourist products in local and surrounding areas; third, in-depth urban experience tour, theme tour and social tour products for young people; fourth, supporting tourist products for RV and self-driving tours; fifth, in-depth study products for different groups of people; sixth, in-depth and special tourist products such as cultural experience, sports, health care, beauty care, and food exploration.