Core Insights - The report highlights a shift in the Chinese hotel industry from "price wars" to "value wars," emphasizing high cost-performance as a decisive investment strategy [1][3] - The report indicates that consumer behavior is becoming more rational and cautious, driven by economic slowdown and demographic changes, leading to a focus on high cost-performance in hotel services [4][11] Industry Trends - The report notes that in 2024, China's per capita disposable income growth is expected to drop to 5.1% from 10.3% in 2023, reflecting a trend towards more pragmatic consumer spending [3][4] - The consumer confidence index in December 2024 is projected to be 86.4, a decrease of 1.37 percentage points year-on-year, indicating a cautious consumer sentiment [3][4] Investment Dynamics - The average occupancy rate, room prices, and RevPAR (Revenue per Available Room) in the hotel sector are expected to decline in 2024, prompting investors to prioritize return on investment and cost sensitivity [4][5] - The report outlines a strategic model for high cost-performance hotels, focusing on cost control, quality assurance, and experience enhancement as key components [5][11] Company Strategies - Dongcheng Group has developed a comprehensive high cost-performance solution that includes optimizing product design, reducing costs through modular construction, enhancing revenue through membership operations, and ensuring consistent service quality [7][9] - The group aims to provide better value for consumers while achieving high returns for investors, thereby shortening the ramp-up period for new hotels and lowering supply chain costs [7][9] Performance Metrics - The report introduces the China Hotel Cost-Performance Index (CHCPI), a quantifiable metric for evaluating hotel value based on location, service quality, hardware facilities, and customer experience [12][13] - Dongcheng Group's brands have excelled in the CHCPI rankings, showcasing their competitive advantages in various market segments [12][13] Competitive Landscape - In the economy hotel segment, City Convenience ranked first with a cost-performance index of 1.09, attributed to its balance of hardware facilities and cost control [13] - In the mid-range segment, Berman Hotel topped the list with a score of 1.42, demonstrating superior performance across hardware, service quality, and customer experience indices [13][14] - The report emphasizes that high cost-performance will continue to be a core trend in the budget hotel market, with a focus on optimizing product services and reducing construction costs [11][15]