Huazhu is making Orange Crystal a leading brand in the mid to high end market.
"From the current market in China, economy and mid-range hotels account for the majority of 80%. Less than 20% of hotels are above the mid to high end, which means there is huge growth potential in the market." Huang Huixing, Senior Vice President of Development for the Mid to High end Hotel Business Unit of Huazhu Group, said at the Orange Crystal Brand Appreciation Conference on April 11th.
The Orange Crystal Hotel was established in 2006 and has become popular in the hotel industry with its design sense. In 2017, Juzi Crystal was fully acquired by Huazhu Group for 3.65 billion yuan, becoming one of the high-end hotel brands under Huazhu.
Cao Juan, CEO of Huazhu Group North China Company and CEO of the Mid to High end Hotel Business Unit, introduced that compared to the past when business travel was only a pure business trip, now; Quota; Combining Business, Travel, and Leisure; Quota; The business travel method is becoming a new trend.
The operation strategy of Orange Crystal is also constantly iterating and upgrading in combination with the development trend of the liquor and tourism market in recent years. At present, the positioning of Orange Crystal has shifted from a leisure hotel to a business travel hotel, and Orange Crystal 2.0 has been launched as the first brand of mid to high end hotels.
It is reported that the new Orange Crystal 2.0 emphasizes quality business, adding 18 crystal specific services and fields on top of the standardized 18 crystal services, including personalized services such as music, whiskey DIY, whiskey tasting, cocktails, and late night cafeterias.
Zhu Meiping, Product R&D Director of the High end Hotel Business Unit of Huazhu Group, stated that Orange Crystal 2.0 aims to provide guests with a peaceful and comfortable space, redefining the travel life of modern urbanites. In 2024, Orange Crystal will also launch a 2.5 version with modern business as the keyword, adding functional spaces such as full day dining, banquet halls, restaurant private rooms, and cloakrooms to enhance customer experience.
On the other hand, in the past two years, Orange Crystal has also been accelerating its store opening speed. According to Huazhu's financial report data, as of the end of 2023, the number of Orange Crystal in operation was 183, an increase of 19 from 164 in 2022; The number of hotels to be opened increased from 57 at the end of 2022 to 119 at the end of last year.
Since March 21st this year, the first flagship store of Orange Crystal 2.0 in the Southwest market officially opened, accelerating the deep layout of the Southwest market. In addition, in just over three months this year, Orange Crystal has added 11 new hotels in operation. As of April 12 this year, the number of hotels in operation has reached 194, and it is about to exceed 200 stores.
According to data from Maidian Research Institute, high-end hotel brands in China have maintained double-digit high-speed growth for five consecutive years. In 2023, there were 559 new high-end hotels opened nationwide, with 73646 new rooms added, ranking first among all newly added hotels in various categories. In the first quarter of this year, the growth of mid to high end hotels accelerated, with a total of 159 newly opened mid to high end and above hotels nationwide, accounting for over 70% of the total.
With the upgrading of consumption and the entry of the domestic hotel industry into a stage of high-quality development, mid to high end hotels have also become a battleground for major hotel groups. Shoulv, Huazhu, and Yaduo have launched brand matrices to accelerate the layout of mid to high end hotels.
Regarding Huazhu's mid to high end hotel strategy, Huang Huixing stated that it will be promoted through a combination of multiple mid to high end brands. Crystal and Manxin are expected to achieve 250 new targets this year, striving to achieve the challenge goal of over 300. It is expected that within 3 years, high-end hotels such as Crystal and Manxin will quickly occupy the core areas of first and second tier cities nationwide, establishing benchmark and flagship stores.
For the expansion and chain operation of mid to high end hotels, the supply chain has always been crucial. Chen Xiaowei, Senior Director of Supply Chain at the Mid to High end Business Unit of Huazhu Group, emphasized, "Since last year, Huazhu has begun to establish a mid to high end supply chain. The future of mid to high end hotel supply chains such as Orange Crystal and Manxin will definitely be based on standardized personalized delivery."
A standard and high-quality supply chain can effectively reduce hotel preparation and operational costs. In terms of construction costs, Orange Crystal Hotel relies on the Huazhu supply chain system. Thanks to the advantages of "modularization+centralized procurement and price reduction" of Huazhu Group, the average cost per room of Orange Crystal 2.0 Hotel is controlled at around 160000 yuan.
In terms of operating costs, the Orange Crystal Hotel currently adopts an industrial standard modular production method, achieving unified customization and installation of factory products, shortening the construction cycle, and significantly reducing labor costs. With the empowerment of Huazhu's intelligent system, the occupancy ratio of Orange Crystal has been controlled from around 0.35 to 0.2, further reducing operating costs.
Regarding future planning, Huang Huixing stated that as the first high-end brand of Huazhu Group, Juzi Crystal already has 194 stores nationwide, and with nearly 320 signed stores, it plans to open 750 stores by 2025.