Core Insights - The Chinese hotel industry has nearly 350,000 facilities and a total of 17.64 million rooms as of December 31, 2024, with a slight decline in the chain room rate to 40.09% compared to 2023 [1][2] - The top 50 hotel groups in China saw significant growth, with a 13.17% increase in operating room numbers and a 14.03% increase in operating stores in 2024 [1][5] - The market is shifting towards mid-to-high-end hotels, driven by changes in consumer spending patterns, while the economy hotel segment is entering a phase of optimization [1][4] Hotel Industry Overview - As of December 31, 2024, the total number of hotel facilities in China is approximately 350,000, with a total of 17.64 million rooms, marking three consecutive years of growth [2] - The number of chain hotel rooms has increased by 316,100 to nearly 7.07 million, reflecting a growth rate of 4.68% [2] - However, the chain hotel room rate has slightly declined, with the rates for hotel stores and rooms falling to 26.75% and 40.95% respectively in 2024 [2] Market Dynamics - The structure of hotel products is changing, with economy rooms making up 54.48% of the total, while mid-range, high-end, and luxury rooms account for 22.59%, 15.26%, and 7.67% respectively [3] - From 2018 to 2024, the proportion of economy rooms has gradually decreased, while mid-range and high-end room shares have increased significantly [4] - The chain rate for economy rooms dropped from 32.49% to 29.96%, while mid-range and high-end room chain rates increased to 44.70% and 55.33% respectively [4] Top 50 Hotel Groups - The top 50 hotel groups in China experienced a growth of approximately 630,000 rooms, representing a 13% increase [5][6] - The top 10 hotel groups account for nearly 60% of the total chain hotel market, highlighting their significant role in industry growth [5] - The ranking of hotel groups has changed, with the introduction of the eLong Hotel Technology Group into the top ten for the first time, ranking eighth with 176,457 rooms [6] Industry Consolidation - eLong Hotel Technology Group, established in late 2021, has rapidly expanded through acquisitions, including a recent purchase of Wanda Hotel Management for 2.49 billion yuan [7] - The trend of online travel agencies (OTAs) acquiring hotel groups is reshaping the industry landscape, enhancing their supply chain control [8] - The integration of existing quality accommodation by OTAs is expected to invigorate the market and increase competition [8]

Core Viewpoint - The Chinese hotel industry in 2024 is expected to face "weak expectations" realization and an imbalance in supply and demand. However, there are potential opportunities in the South China market, hotel product renewal demands, and the growth potential of leading brands in lower-tier markets [1][5][8]. Group 1: Market Dynamics - The competition landscape in South China is evolving, with some latecomers gaining market share, leveraging core brands to penetrate the region effectively. Continuous monitoring of penetration progress and market share growth is recommended [1][11]. - The hotel product renewal demand is changing, with an increasing proportion of hotels aged 6-10 years across major groups by the end of 2024 compared to the end of 2023. This trend indicates a potential rise in the number of hotels needing renovation in the next 1-2 years, leading to possible shifts in brand competition dynamics [1][25][26]. Group 2: Supply and Demand Changes - The hotel industry's supply-demand relationship has undergone significant changes from 2023 to 2024. Initially, there was a "supply shortage" due to pandemic impacts, followed by a recovery phase where demand surged, attracting more investors and increasing supply. However, demand has shown signs of divergence, with leisure travel continuing while business travel remains slow to recover [5][7][8]. - The overall RevPAR for the Chinese hotel industry is projected to decline by approximately 5% year-on-year in 2024, reflecting a cautious market outlook influenced by high base effects and slow recovery in business travel demand [5][7]. Group 3: Competitive Landscape in South China - The existing competitive landscape shows that major groups like Jinjiang and Eastern Group have a significant presence in South China, with approximately 20% and 40% of their hotels located in the region, respectively. In contrast, Huazhu has a weaker presence, with only about 6% of its hotels in South China [11][12][19]. - There is still potential for brand updates and renovations in the South China market, with a notable percentage of hotels needing upgrades. Continuous observation of the competitive dynamics and brand selection for these renovations is advised [12][19]. Group 4: Product Renewal and Aging Issues - The aging of hotel products is becoming more pronounced, particularly in the economy and light management segments. Major brands are facing increasing pressure to renovate or update their offerings, with a significant portion of their hotels aged 6-10 years [25][30][33]. - The current market presents four potential paths for franchisees with aging products: upgrading existing brands, switching to leading brands, opting for soft brands with lower investment, or maintaining the status quo, which may lead to declining profitability [27][30].