Core Viewpoint - Shangmei Smart Hotel Group plans to continue its direct-operated store strategy, aiming to invest in 100 direct-operated stores nationwide by 2026, capitalizing on favorable rental conditions in the market [1] Group 1: Market Conditions - Rental levels in major commercial areas have decreased by over 50% compared to two years ago, reaching an optimal return rate for hotels [1] - From January to September 2025, the average rental price in eight key cities was 2.73 yuan per square meter per day, down 11.9% year-on-year [1] - Average office rental prices in these cities also saw declines, ranging from -21.2% to -3.2% year-on-year [1] Group 2: Company Strategies - Shangmei Smart plans to diversify its direct-operated stores across multiple brands, not limited to its existing economy hotel brand [1] - Xi'an Tourism has shifted its strategy from expanding direct-operated hotels to increasing franchise hotel development due to changing industry conditions [3] - Junting Hotel has postponed its direct-operated hotel investment and renovation projects to December 2027, citing market fluctuations and strategic alignment [3] Group 3: Industry Trends - Major hotel groups are reducing the number and proportion of direct-operated stores, with Jinjiang Hotels decreasing from 686 to 627 direct-operated stores, and Huazhu Group from 633 to 596 [4] - The trend indicates a shift towards a lighter asset model among leading hotel groups [5] - Industry experts suggest that for local limited-service hotels, franchise development is the fastest growth path, while direct-operated stores serve primarily as flagship locations to attract franchises [6] Group 4: International Comparisons - International hotel groups are increasingly adopting a franchise model, with over 78% of hotels operated under this model, compared to only 0.8% direct-operated [7] - The franchise model is seen as a core strategy for scale expansion due to its flexibility and efficiency [7] Group 5: Recommendations - Experts recommend that hotel groups adopt a more flexible operational mindset rather than sticking to rigid models, focusing on opening and effectively operating profitable stores [8]

Core Insights - Shangmei Smart Hotel Group has initiated a strategic partnership with various cultural and tourism sectors in Gansu, marking a significant milestone in its expansion in the northwest region of China [1] - The recovery of tourism demand has led to a surge in hotel accommodation needs in the northwest, with over 40 million visitors and a spending of over 22 billion yuan during the 2025 Spring Festival [2] - The northwest region is seen as a hotbed for investment due to favorable rental conditions and government policies supporting the hotel industry [2] Group 1: Shangmei Smart Hotel Group's Expansion - Shangmei Smart Hotel Group has established over 700 hotels in the northwest region by March 31, 2025, with 142 located in Gansu [2][3] - The group aims to play a dual role as an "investment model innovator" and "industry upgrade enabler" to capture value in the northwest hotel market [3] Group 2: Competitors in the Northwest Market - Major hotel groups like Jinjiang and Huazhu have also expanded in Gansu, with over 500 hotels opened collectively by these three groups [4][5] - Jinjiang has over 200 hotels in Gansu and nearly 300 signed contracts, while Huazhu's main brands have a significant presence in the region [5][6] Group 3: Market Dynamics and Future Outlook - The northwest hotel market is entering a new competitive phase, with various hotel groups vying for market share [7] - The region's vast potential and low hotel chain penetration make it an attractive target for expansion, with several groups already establishing a presence [9][10] - The competition is expected to intensify as major players like Jinjiang, Huazhu, and Shangmei Smart Hotel Group continue to expand their footprints in the region [11][12]