A senior hotel manager once said to me: upscale hotels seem to be unattended, in fact, the profitability of the way especially more, do is also a long business, as long as the upscale hotels built, there is no worry about not making money.

Many people's understanding of upscale hotels, are still stuck in the inherent impression of fast hotels, that upscale hotels and fast hotels to do the comparison, but the infrastructure is more luxurious, the price is more expensive.

If the upscale hotels are not occupied for a long time, will they face the same risk of losing money as the express hotels?

But not really, as a Shangri-La executive once told me, although occupancy is an important source of revenue for upscale hotels, the impact is not absolute.

For upscale hotels, an occupancy rate of 50% is already a hot phenomenon, and after the occupancy rate reaches 75%, the entire hotel is in a state of high load, and the need to control the occupancy rate in a timely manner, so as not to affect the operation of the entire hotel.

Generally speaking, a high-end hotel annual room occupancy rate, as long as you can maintain 20%. You can maintain a break-even for the hotel.

The rest of the profit model, depending on the hotel's other projects, and upscale hotel support services, is to attract guests to come to the focus of consumption.

Here is a comprehensive analysis of the seemingly unattended upscale hotel, in the end, how to profit.

"Upscale hotel" refers to more than 4 stars, with a luxury hotel environment and facilities for business and leisure travelers to provide first-class residential food and beverage and services.

Upscale hotels are generally built in large port cities, or business areas in the city, higher consumption, better service, is the star, the activities of the rich.

From the definition of high-end hotels, we can learn that the cost of investing in the construction of a high-grade hotel is very high, but the premise of high investment, usually not many guests to stay, so the hotel in the end how to profit?

In addition to the room rates brought by the guests, other ways to profit mainly from the following points.

01. Hotel supporting projects

High-end hotels in addition to rooms, there are other services, generally speaking, the hotel's 1 to 5 floors, is not to provide accommodation, where there will be a large conference room, as well as food and beverage, such as Chinese food, Western-style food, buffet, bars, bars, swimming pools, high-level gymnasiums, and so on.

The main thing is to look at the marketing team of the hotel, if the hotel's food and beverage industry is done well and attractive enough, it can bring a lot of profit to the hotel.

02. Wedding banquets, annual corporate meetings

But all the larger hotels, in addition to providing accommodation, will also undertake wedding banquets, large-scale annual corporate meetings, including some of the important meetings in the unit.

Mainly depends on the hotel will not publicize, enough to attract people, many high-end hotels in the wedding season, basically every day at the same time to receive a lot of new wedding.

In addition, in daily life, many companies hold important meetings, or annual meeting, in order to enhance the sense of ceremony, will also choose to hold in the high-grade hotel.

And according to my observation, in our local area, many insurance companies and real estate agents have too many employees, so every time they hold a large meeting, they will cooperate with the hotel, and even signed a long-term cooperation agreement.

03. Rental subsidies

This is a kind of project support, many first-tier cities five-star hotels are in the top of high-grade office buildings, which, in Guangzhou, Zhujiang New City business district there are especially many.

Many high-grade office buildings in order to enhance their own grade, to attract more enterprises to come to move in, will sign a cooperation agreement with some high-grade hotel.

Part of the hotel's revenue can be subsidized by the office building's rent.

04. Seek capital premium

The location of high-end hotels is very strict, generally choose the busy areas of the city, or the future value-added very fast.

There is also a saying, "where a five-star hotel is built, means that the price of land in that place is going up."

Many upscale hotels have a low-cost investment in the first place, and as land prices rise, they can be resold to local businesses or organizations that need them.

05. The hotel serves as collateral for a loan.

This point is also overlooked by many people, high-grade hotels as a relatively high-quality assets, can be used as collateral for loans, many hotels can take advantage of this, to get a relatively low interest rate loans.

And then the amount of money lent for other investment directions, to gain income.

In fact, when building upscale hotels, many investors have other roles to play besides making a profit.

For example, many real estate companies invest in tourist towns, or high-value business sites, in order to enhance the overall class and attract guests.

They all choose to build a high-end hotel.

Also some non-real estate companies will choose to invest in high-end hotels as a display of their own image, not only to expand the company's business, but also to meet the needs of the daily operation of the reception of the enterprise, two birds with one stone.

These are some of the simple shares about why upscale hotels can stand for a long time.

So the line is like a mountain, any industry has his own reasons for existence, the opportunity to stay in the minds of those who are prepared, we still have to learn more with them to learn ah.

I still have a little bit of a say in this, after all, I have done in five-star hotels. Inside the facilities how I do not say, anyway, the price is top, the most common standard room are to be more than one or two thousand, there is the kind of villa suite, the cheapest are more than 10,000, this is not five-star, I do not know what is five-star, first of all, in the absence of the epidemic in the normal time, in the peak season, the entire hotel's ability to do business can still be, the guest law can be in the Golden Week to reach 100% occupancy, the guest law in the usual low season can also be able to reach 100% occupancy, the hotel can be in the golden week, the hotel can also be in the peak season. In the usual off-season can also reach three or four percent occupancy rate, because this upscale hotel he a pick up the casual guest is actually quite small, the vast majority of the conference or some other activities, including the star's presence.

Anyway, this upscale hotel investment of several hundred million, the annual profit can reach 10 million even if it is good, some people may feel strange, according to this profit model to be a long time, the hotel will be able to recoup the cost, is not going to make money? I can only say that you are too naive, contact to this thing you realize how black this thing, first of all, the hotel industry you know what his most valuable? You think it is the hotel itself is not, in fact, is the hotel below that piece of land, I am in that hotel people invested a few hundred million, backhandedly take this hotel plus the land, directly to the bank to pledge more than 10 times the cash.

People are so play, you think is to rely on the hotel to make money, in fact, not at all the hotel to make a few dollars.

So honestly inside the waiter's attitude is not good at all, the service attitude is certainly not up to standard, because people do not rely on that to make money, I do not know if all the hotels are not like this, but at least I serve that hotel he is so do not rely on the hotel to make money.

Only the bottom of the pyramid will think of opening a hotel to make money. People those upscale hotels are mostly diversified enterprise groups, the hotel's real estate can go to the bank mortgage financing for other money-making areas, such as a large hotel to the bank pledge, financing 300 million, and invested in another real estate, and mortgage financing, made a chip business, and mortgage financing, and made a graphene business, and mortgage financing, and made a carbon fiber business, a circle turn down. Assets tens of billions of large enterprise group, ding ding ding ding bell listed, and turned several times, the market value of one hundred billion, pestle and mortar in the high-grade hotels there, just need to be very decent, very bright and beautiful show up there, want to get up to publicize a little bit, extremely luxurious reception of those high consumption of the crowd on the line, usually do not necessarily have how many customers, do not need to earn much money, as long as the profit to maintain the operating costs on the line, along with the Long-term chronic overall economic growth, the land will also appreciate, and then through the expansion of equity over and over again and harvesting, the surface looks like the hotel is not hot business, but the shareholders' pockets have long been full.

Look at those big conglomerates, which is not the case, the business is even losing money, and those major shareholders are worth tens of billions of dollars, some of them have their own real estate properties in foreign countries, but they just don't see their own businesses to make money.

Do you understand the reasoning behind this?

In fact, what we see and the real situation of the hotel may have a big gap, for example, we look at the hotel on the surface usually not many people in and out of the hotel, as if there is no customer, but in fact, the hotel overall occupancy rate in fact is not too low.

Let's take a look at the data related to star-rated hotels in 2019 before the outbreak.

As of the end of 2019, there were a total of 10,003 star-rated hotels in China*** , of which 62 were one-star, 1,658 were two-star, 4,888 were three-star, 2,550 were four-star, and 845 were five-star.

Also in 2019, the combined operating income of the country's 8920 star-rated hotels amounted to 190.777 billion yuan, with a net profit of 5.559 billion yuan.

From the current overall performance of China's star-rated hotels, in fact, the entire industry still continues to be in a state of profitability, except that the profitability space is very small, the overall star-rated hotel profit margin is only about 3%.

And among the many star-rated hotels, the real profit is actually mainly contributed by the five-star hotels , for example, in 2019, the five-star hotel operating income of 81.468 billion yuan, corresponding to a total profit of 6.137 billion yuan, and the net profit margin of about 7.5%.

Compared to five-star hotels, four-star hotels three-star hotels profitability is relatively weak, four-star hotels in 2019, an overall loss of 433 million yuan, three-star hotels overall loss of 278 million yuan.

Also in 2019, the overall profit of two-star hotels is 127 million yuan, and the overall profit of one-star hotels is 0.06 billion yuan.

This shows that at present, China's hotel industry presents a trend of profit at both ends and loss in the middle, and those that are really profitable are either high-end hotels or some relatively civilianized hotels.

Then why five-star hotels usually look nothing, but the profitability is still relatively strong? In fact, there are several main reasons for this.

First, five-star hotels diversify their sources of income.

In many people's impression, the mention of the hotel many people think that just for accommodation, in fact, for some high-end hotels, their function is far more than just for accommodation, but there are a variety of functions, such as accommodation, catering, meetings, entertainment, beauty, leisure, etc.

The hotel is the first of its kind in the world, and it is the only hotel in the world that can provide the best service.

In this case, the lodging is not the highest contributor to the hotel's profit, but the food and beverage is the main source of income for these high-end hotels, according to the actual situation of the major hotels in the country.

This situation is not only in high-end hotels, some low-star hotels are also the same, For example, in 2019, among the national hotel operating income, the proportion of food and beverage operating income reached 42.49%, while the proportion of room income is only 38.19%.

For those cities with a more developed economy, the proportion of food and beverage in hotel revenue is even higher, for example, the overall revenue of Beijing hotels in 2019 was 19.991 billion yuan, of which the proportion of food and beverage revenue reached 49.7%, and the proportion of room revenue was only 26.84%.

And the margins on high-end hotel food and beverage are so high that a buffet might cost more than $200.

Of course, in addition to the buffet, they usually have a special meeting or wedding banquet and other activities, this activity each time to the hotel to create revenue may reach tens of thousands or even hundreds of thousands of dollars, which is the hotel's real source of revenue.

Secondly, the occupancy rate of five-star hotels is relatively high.

Usually we look at the hotel seems to be no one in and out, in fact, just an illusion, from the actual situation, the occupancy rate of those high-end hotels is not low.

Because these hotels are open 24 hours a day, customers are dispersed at different times of the day, that's why we see the hotel is not so many people, but in a day to calculate, the hotel's overall occupancy rate basically can reach more than 50%.

For example, in 2019, the average occupancy rate of five-star hotels in China reached 60.94%, the average occupancy rate of four-star hotels reached 55.11%, and the average occupancy rate of three-star hotels reached 52.15%.

This rental rate is not particularly high, but it is acceptable for hotels.

In fact, for these high-end hotels, the occupancy rate of 100%, rather than a good thing, the occupancy rate of 60% to 80%, in fact, is the most comfortable state, to the customer experience is also the best.

Third, five-star hotels have high single-guest consumption.

High-end hotels are faced with high-end customer groups, these high-end customer groups have strong consumption ability, and the per capita consumption is also very high, we take the guest room as an example, 2019 the national average guest room unit price of five-star hotels is roughly 596.5 6 yuan per room/per day, and this unit price is a lot higher than that of an ordinary hotel.

It is also because the guest unit price is higher, so even if the occupancy rate of the hotel is not so high, the profit that can be created for the hotel is not a few. If a five-star hotel has 300 rooms, the average unit price of each room is 600 yuan, if the average occupancy rate of 55%, the daily revenue of the rooms is close to 100,000 yuan, a year's revenue of more than 36 million, if the food and beverage, entertainment, conference reception and other revenues are included in the calculation, a year's revenue may reach more than 100 million yuan.

From this, we can see that although these high-star hotels are usually not crowded, they are still able to continue to make a profit.

And for these high-end hotels, their initial investment is very large, if the property is self-built, the initial investment is likely to reach hundreds of millions of dollars or even billions of dollars, even if the business is leased, the period is also very long.

In addition, these high-end hotel decoration requirements are very high, the cost of decorating each room is also relatively high, five-star hotels may reach more than 100,000 yuan of decoration costs for a single room, if the cost of decorating other facilities are included, the cost of decorating a hotel may reach tens of millions of dollars or more.

Because of the high initial investment, it is basically impossible for the hotel to make a profit in the short term, and investing in a hotel is basically a long-term process, such as more than 10 years or even more than 20 years.

For these high-end hotels, as long as the place where the traffic is more, where the location is also better, the marketing is also more in place, in the long run is basically impossible to lose money, which is why they have been standing for many years.

When it comes to hotels, we take it for granted that hotels make money on the basis of how many people live there. In fact, hotels don't rely on lodging to make a profit, and there are other ways to make money.

General hotels and guesthouses will be opened in the downtown area, the flow of people in particular, these hotels are generally national chain of fast hotels, the price of 200 or so, but the price of accommodation in the 500 or more high-end hotels instead of opening in the middle of nowhere, which has to make people ask, open so remote, so little traffic, can make money?

I want to tell you is that these upscale hotels can make money, and can make a lot of money, which is the reason why they stand, I'm here to tell you the secrets of upscale hotel business.

Upscale hotels no one asked, but can stand the reason

First of all, we have to figure out a problem, why upscale hotels seem to no one asked.

In fact, the reason is not so difficult to understand, first of all, the ordinary people will not go to the upscale hotel blind, because they know that they can not afford to consume the place, and secondly, upscale hotels are generally remote location, all right, who will not run to that place to go, and finally is the door of the upscale hotel is very luxurious decoration, it is difficult to give people to create a sign of the people coming and going.

So how does a high-end hotel make a profit?

1, upscale hotels do not lack of guests

I used to do assistant general manager, every general manager business trip to stay in upscale hotels, the price is more than 600. Each time as long as a good time to determine the business trip, I will be 1 - 2 days in advance to call the hotel to book a room, on the one hand, to ensure that the leadership has a place to live, on the one hand, in order to ensure that you can get the hotel room booked.

We really don't believe it, high-grade hotels, if you don't book on the day of check-in, often there is no room for you.

High-end hotel customer groups are very fixed, have the economic ability of successful people, middle and senior managers are these hotels are loyal customers, the former out of their own pocket, the latter has a company reimbursement, there is a general valuable guests or leaders, reception to stay in the choice of these high-grade hotels.

So the upscale hotel people simply do not lack of guests, on the contrary, the quality of these guests are relatively high, they seek just upscale hotels good experience and service.

There is also a situation, some guests in order to protect their privacy, will also prefer those remote upscale hotels, such as the stars, said everyone should understand.

2, the main business of high-end hotels with diversity

The biggest difference between high-end hotels and ordinary hotels is that its main business is a lot of money, not only by staying in the money, high-grade hotels in addition to lodging business, the following these businesses are also the main force of their money.

Business

Now the hotel's most enthusiastic business, but also the most lucrative business is to undertake a variety of banquet, such as wedding banquets, housewarming banquets, celebration banquets, thank you banquets, etc.

The hotel's main business is that it has a lot of business, not just rely on the stay to make money.

The banquet business is the lowest cost, the highest profit business, the ordinary price of a table of dishes in the 1000 or so, a little better 2000, there are more expensive we will not say, but no matter how much you price, in fact, the cost is not more than 300, this profit space is very huge.

Undertake banquet in addition to catering can make money, is the venue rental fee, especially the wedding. High-grade hotel banquet hall is divided into grades, if you want to scene better banquet hall, you have to spend money to rent, this rental fee is pure income, the price is generally 3000 up.

And organizing banquets, then, many guests, vehicles are also more, the general small hotels simply do not have the ability to undertake large banquets, this time high-end hotels in the remote area of less people the advantages of a large territory came out.

Meeting room business

Perhaps some people will ask, open a meeting also want to go to the hotel? I would like to say that, yes, the meeting is also to go to the hotel, only this meeting is not a small meeting within our company.

Many of our large group of companies, each year will be held regularly in the national conference or regional meetings, this time the four corners of the country will gather together, obviously the company is not so large place to provide, this time it is necessary to go to the hotel to rent a conference hall, the price of the conference hall is not cheap to accommodate 100 people in the conference hall, the price of at least 5,000 dollars.

In order to facilitate these people to come to the meeting of the company will also be unified arrangements to stay in this hotel, so is not the accommodation business has been supplemented?

In addition to the meeting we are talking about, what academic exchanges, product launches, press conferences and so on sounds like the name of the meeting, will rent a conference hall or multi-purpose hall of high-grade hotels, the income is often also very objective.

We ordinary people, even if they have not been exposed to those high profile meetings, the company's annual meeting should always participate in it, the company's annual meeting is actually very similar to the banquet, catering, but also the venue of the rental, which are carried out in high-end hotels.

Catering

I didn't realize that hotels had joined the catering industry, but in fact, the catering business of hotels only started to pay attention to it after the epidemic.

Our company belongs to the usual reception of more types of companies, generally we will choose to receive in the upscale hotel, one to facilitate the leadership of the accommodation, and the hotel environment is good, the food is good to eat is not important to do reception anyway, the most important thing is the environment.

Before the epidemic, the hotel's catering business in fact, in addition to banquets and conference meals, catering business are relatively loose, there is a catering revenue, is from the guests who stayed.

High-end hotels not only serve breakfast, but also Chinese food and dinner, and the price is very expensive, I once stayed in Sanya Wuzhizhou Island on the hotel, I ordered two dishes for dinner, a green vegetable and a bowl of soup, the price has been hundreds.

But now I found that the major high-end hotels, in addition to the traditional catering business, also launched a high-end seafood buffet service.

The time period of this business is 14:00 pm - 9:30 pm, the hotel will be the morning customers to eat breakfast in the place used to do seafood buffet restaurant, the price is slightly higher than outside, but there are a lot of guests, and are concentrated in the evening meal, the impact on the guests stayed in the small.

In fact, this is a little bit of damage to the image of high-end hotels, but in the past two years because of the epidemic, out of the people become less, a variety of large-scale meetings, focused on business trips are not arranged, so the traditional business of high-grade hotels have been affected by this seafood buffet business, is to make up for the income of an important source of income, and increase the popularity of the hotel and fame.

3, upscale hotels have lower costs

A business earns money or not, we also have to look at his high cost, upscale hotel costs are actually very low, why?

Remember, where the real high-end hotels, they are not rent this piece of big costs, because high-end hotels are the owner of their own land, their own house to build a hotel, and high-grade hotels because of the remote location, very few in the downtown area, so the price of the land is not high.

The cost of hotel investment is mainly in the early stage, as long as the hotel is built, basically waiting for rent to make money, the late cost of the largest in the labor, followed by the maintenance of equipment, but the hotel most of the staff wages are not high, because of the package, the equipment is not often maintenance, but regular.

The environment of the upscale hotel is the whole, in addition to the hotel's internal environment, the external green is also part of, and are well planned, so some companies do group building need green land, will also come to upscale hotels to rent, the rental cost of the green is more expensive, the price of the direct 5,000 to start with, and this leasing service Psi will be brought to the hotel for the rest of the business.

After reading this, we will find that the original upscale hotels and our imagination is still very different, and not so much into the human world, and not so unattended, people's customer base is stable, the main business is diversified, there is no worry about earning money.

We think carefully, it is not difficult to find that the business of high-end hotels, although the diversity, but it is interlinked, such as the rental of conference halls will bring customers to stay, banquets will bring visibility to increase the flow of people, it is the interlinked business ideas, creating a high-grade hotels are expensive, but still standing.

No one asked? You go to see their 6 o'clock buffet will understand. Especially five-star hotels, thanks to the high price of shopping mall dining, five-star hotel prices do not seem so outrageous, and a better environment and experience. There's also the ever-present business, wedding spending, and high-end hotels aren't worried at all. And the days are getting better and better.

A: Some high-end hotels and guesthouses properties are state-owned enterprises, government guest houses, sanatorium nature. A few are local bosses pre-investment.

Some high-grade state-owned hotels, due to the system does not adapt to market competition, poor personnel performance, hardware obsolescence, poor service, with market saturation is in a state of perennial losses. But because the property is a business, the location is better, the business within the reception business, even if the loss, but also by the main business to bear.

Private owners invested in hotels, some of which belong to the local investment, investment price is not high, they bought the property, there is no annual increase in rent. In addition with the property value-added, the hotel earns money or not has been less important.

I explained some of the previous experience and information, first of all, to know that most hotels if more than 75% of the occupancy more than a month belongs to the full capacity of the operation. And most over to 20% occupancy is considered a positive ratio operation. This may now have changed, while the hotel operating model and the face of the market and positioning will be higher or lower adjustment. I am talking about ultra-high-end hotels itself is a very narrow source of customers, but he will have a plan at the beginning of the construction. At least his source of customers to maintain the operation of the minimum state is the bottom of the pocket, otherwise the hotel in excess of the expected operating pressure will be transformed or adjust the proportion of internal revenue departments, as a result of the action to increase revenue and reduce the burden.

The hotel is actually a long-term value of the enterprise, he is not according to two or three years of revenue surplus as a consideration of earning not to earn money judgment, we must know that the hotel just opened will have a few years of hot period, as the saying goes, the new pit is still fragrant three days which. So if a hotel in the early stages of construction around the survey and the city mapping are no problem, his hardware as long as it meets the design. Which this project once invested is a silent asset, his recovery cycle length mainly depends on the operation team. If there is no change in the market, the expectations are in line with the design of the initial construction, that super luxury hotel to maintain the occupancy rate of thirty or forty cases is a relatively stable state. Because this hotel needs to be quiet and enough space for guests to feel privacy and luxury, this hotel itself from the dining tables and chairs placed in the distance, to the lobby of the gap in the flow of people. There are also rooms for the transfer of alternative rooms as well as rooms to stay in the guest's reservation and upgrading, or as a way to keep the room quiet and the guest's private habit of emptying the guest room... And so on, all of which are needed to have twenty or thirty empty rooms. And this hotel itself will not build too many rooms, so such prerequisites cause him on the surface, especially in the lobby and other external facing society first step into the open space, let a person feel very few people illusion.

I have a friend who is a professional hotel manager, usually I have discussed this issue with her, I'll share with you what I learned.

First, the hotel investment

The hotel's renovation investment is very large, in terms of my friend's management of the hotel, four-star standard, 168 rooms, the renovation costs at that time is about 40 million like.

Second, the hotel profits low

The hotel is a one-time investment, the later costs are mainly staff wages and utility costs, my friend managed the hotel average annual occupancy rate of about 60%, the average unit price of 250 or so, a year of utility costs of 3 million, a year of staff wages of 1 million, an annual profit of 4 million, it seems to be very lucrative, but the average hotel ten to fifteen years to be Redecorating once, the money earned and are used to engage in renovation. If you still need to pay the rent, then it is basically a loss

Since the investment is large, low profits why the hotel can not stand?

My professional manager friend gave me the answer, the owner earns the appreciation of the property. To my friend's hotel, for example, the hotel is built by the developer, with their own properties, when building residential construction, the hotel was just built when the assessment of 200 million, the developer can be lent from the bank out of more than 100 million, and now the hotel can be assessed at 500 million, the developer can be lent from the bank out of three or four hundred million, so the hotel as long as to maintain a loss or a slight profit, the developer through the value of the property to earn a lot of money! The developer will make a lot of money through the appreciation of the property. So we can see that high-end hotels are basically owned property, there is no rent to do high-end hotels is the reason

1, high-end hotels do not look like a lot of people, but it is not the same as no one asked for, everyone lives in a different level, there are different circles, what others are doing, how do you know?

2, upscale hotel prices are very expensive, very high profits, in general, the occupancy rate of 20% to 30% will have a certain profit, if the upscale hotel all full, it's simply too busy to serve.

3, upscale hotels for customers are mainly large groups of annual meetings, and various large companies group consumption.

Various kinds of meetings are organized, you will give the upscale hotel to bring a good profit.

There are also those big stars are also high-grade hotel consumer groups.

4, the location of the construction of a high-grade hotel, will produce a lot of added value, high-grade hotels around the land prices will rise, high-grade hotel investment, the land price will also rapidly appreciate, these will give the owner a good return.

5, investment in the construction of a five-star upscale hotel, the investor can be through this hotel, the bank to go to the loan, these are the owner of the means of financing.

7, the big bosses, are keen to build high-grade hotels, with these hotels, they will have more channels of financing, but also through the construction of high-grade hotels to generate more added value.

8, a five-star hotel construction investment, is a long-term investment project, the investment amount is high, for the customer base decent child is very narrow, it is not a short-term high return project.

The construction of a high-grade hotel, not only because of the operation of the hotel that little profit. The world of the rich is not so simple.