Homeinn's post-speed era

Looking back at the development of the Home Inn chain, veteran employees like to use words like "explosive" to describe it. Seeing that in less than three years since its establishment, 55 Home Inns have fully bloomed in the eastern, southern, western and northern regions of China, even the employees themselves who participated in it themselves often find it inconceivable.

In Homeinn's plan for this year, this number is still on the rise: 30 new stores will be added nationwide in 2005, which means that, on average, a new store will open its doors in less than two weeks. guest.

From a distance, bright yellow and pure lotus blossoms symbolize modernity and warmth on the exterior walls, making Home Inns special. In China's hotel industry, which has always lacked local chain brands, Home Inns, which has chosen budget hotels as its entry point, has risen dramatically.

It draws on the inspiration of "Express" in foreign "express" hotel services, and mainly provides "B&B" (ie bed&breakfast, bed and breakfast) services; the price is positioned between 150 yuan and 300 yuan , targeting customers as small and medium-sized business people, leisure and self-help tourists.

Between the high-priced star-rated hotels that used to dominate the market and the small hotels with low-quality services, Home Inns has carved out its own living space.

When it was founded in June 2002, Home Inns established its vision as "China's most famous accommodation brand", and the development strategy of rapid distribution and rapid expansion came into being. As Ji Qi, director and former president of Home Inns, said: "A national hotel brand must establish a national market layout, especially before the entire market is immature."

And in 2004 At the end of the year, the new CEO, Sun Jian, took over the baton from Ji Qi and put standardized management on the agenda. Sun Jian said that his next task is to develop a highly replicable chain road while maintaining the rapid development of Home Inn.

In order to "accelerate" cooperation

When Liang Rixin, vice president of Beijing Capital Tourism Group, was looking for partners for the development of the group's "Jianguo Inn", Ji Qi, then president of Ctrip.com, was also planning With the development of a group of stable hotel resources.

"It was the fall of 2001. We almost hit it off and decided to start Home Inn together to develop the economy hotel market." Recalling the scene at that time, Liang Rixin still couldn't hide his excitement.

Ji Qi once used a famous metaphor to illustrate how to choose market survival opportunities. A glass bottle full of large stones seems to have no space. In fact, there is a pile of small stones between the gaps between the large stones; then, in the gaps between the small stones, you can continue to fill Full of fine sand; and finally, when you think there is no room for it, you can still see a shred of water in it.

The birth of Home Inns is precisely in the seemingly saturated hotel market, where business opportunities for budget hotels were discovered. If you look at the classification of stars, China has the largest number of two- and three-star hotels, but the good and the bad are mixed, and the occupancy rate is generally low. On the other hand, a group of core consumer groups have been formed: business people such as middle-class white-collar workers and tourists who travel by themselves have a great demand for hotels with convenient transportation, economical prices, clean and comfortable hotels - there is a gap between supply and demand with a large gap.

"Both of us have seen such a blank spot in the market, but if we start from scratch, it will take at least two years." Liang Rixin said frankly that BTG had already developed four budget hotels at that time." Jianguo Inn", but as a pure state-owned enterprise, to continue to make breakthroughs, it has encountered many obstacles in terms of talents, resources, and concepts. . And if Ctrip builds its own model store, it will inevitably be a long-term investment in site selection, investment, engineering construction, and personnel training.

The strong cooperation between China's largest tourism giant Beijing BTG Group and China's largest travel agency service company Ctrip has accelerated the birth of Home Inns. It only took more than half a year from when Ji Qi accidentally passed Jianguo Inn on the streets of Beijing and sprouted the intention of cooperation.

BTG invested four Jianguo Inns into Home Inns at cost prices, while Ctrip was the main source of tourists for Home Inns. "The goals of both parties are very clear. What I need is a market and a reservation network, and what he needs is a model store as a foundation. Now, when combined, this company will immediately have ready-made hotels, as well as a strong reservation system and customer resources. Therefore, it is a miracle that Homeinn made money from the first day." Liang Rixin, who has 35 years of experience in the hotel industry and is now the chief operating officer of the Homeinns hotel chain, believes that the foundation of this miracle is fast , Reasonable resource integration.

Seize the opportunity, if you don’t advance, you will retreat

The network layout of Home Inn adopts the strategy of center blooming and point and surface combination, with Shanghai, Beijing, Guangzhou and Chengdu as the center, from east to west, from coast to inland Advance, and soon set up locations in more than ten large and medium cities.

In 2002, Homeinn's turnover was 20 million yuan, rising to 70 million yuan the following year, and 130 million yuan in 2004. In Liang Rixin's words, this kind of "fastness" is the driving force of survival demand, "We have to be fast."

Before Home Inns, the economy hotel market already had "Jinjiang Inn" and "Xinya Inn" Wait for a few local brands to start early; and after Home Inn, a large number of foreign brands "IBIS", "Holiday Express" and "Super 8" are eyeing. Compared with the budget hotels in developed countries, which account for 70% of the entire hotel market, the domestic market share is less than 10%, which is undoubtedly very attractive. The non-mainstream market will become the mainstream market in the foreseeable future, and at this moment, the old rivals are advancing and the new ones are catching up.

Ji Qi, the former president of Home Inns, who played a vital role in the rapid development of Home Inns, once pointed out that the land resources in the city center are extremely limited, and only by quickly occupying the location advantage can we take the lead.

Home Inns, which focuses on first-tier business cities, does exactly that. In 2003, 12 new stores were opened, and in 2004, 30 new stores were opened. "When the whole market has not yet matured, expand the film." Liang Rixin emphasized, "When there are few products and high demand, the faster you expand, the better. Well, there are more opportunities. Now that so many brands are coming in, it is more difficult for later brands to surpass the previous ones. This fast is forced."

On the other hand, budget hotels are a good investment The rate of return also allows investment decision-makers to continue to make profit-seeking investments. As a company from a traditional industry, the Home Inn hotel chain has been favored by venture capitalists IDG and SoftBank Investment, which have always preferred IT companies, which is enough to demonstrate its rapid profitability. Zhang Suyang of IDG once said that the ideal investment target of venture capitalists is enterprises that can receive returns within two or three years.

According to Liang Rixin, all branches of Home Inn can basically guarantee an occupancy rate of more than 90%. The investment of RMB 5 to 8 million in a single store can be recovered in about three years, and the annual return on investment is as high as 30%. The average gross profit margin is about 50% to 60%, and even reached 70% in Shanghai. In contrast, the gross profit margin of the general three-star hotel is only 20% to 30%, which is more than doubled.

"It is often said by hoteliers that the money we make is the cost of the bed and board. That is to say, the real money in the hotel's entire function comes from the guest room, and it is difficult to make money from fitness and entertainment facilities." Liang explained, Homeinn's profitability is basically just relying on guest rooms and small meals, with no extra facilities. Revenue is capped when occupancy reaches 100%. Therefore, only relying on the "bed board fee" to operate, must have scale to be able to make more profits. Therefore, the rapid formation of scale has become an inevitable choice for investors.

When it comes to speed, a very interesting comparison is "Jinjiang Inn". This budget hotel brand was born in Shanghai Jinjiang Group, a tourism giant that and Beijing BTG each occupy half of the country in the north and south of China. The establishment of Jinjiang Inn, such as the predecessor of the home, "Jianguo Inn", was at least three years earlier. In 2000, when Liang Rixin came to Shanghai to visit and study for the establishment of "Jianguo Inn", it already had three or four branches, but its development was very slow before the establishment of Home Inns. In the past two years, Jinjiang Inn has also started to attack frequently through direct sales, franchise, and market franchising, and has made every effort to develop its branch network, and proposed a plan to reach 100 stores in 2005. To some extent, it cannot but be said that the rapid expansion of Home Inns brings pressure and motivation to competitors.