Gästehäuser lassen Hotels vor Konkurrenzdruck nicht mehr schlafen

Chen Lang manages a dozen chain hotels and had a more difficult time this year than in previous years - the occupancy rate declined, the room prices dropped, and the profits plummeted.

What worries hotel operators even more are a series of data: During this year's "May Day Holidays", the share of vacation rentals in bookings already reached 55%, surpassing traditional hotels for the first time.

It seems that vacation rentals are taking away the hotels' sleep. But the matter is not that simple.

#01

Vacation rentals are in fierce competition

"Business is better this year than last year."

Luo Ran operates vacation rentals in Xi'an and Bortala in Xinjiang. One - third of her vacation rentals in Xi'an are budget rooms, and two - thirds are mid - range rooms. The vacation rentals in Xinjiang target the upper - middle class.

She told the Zhengu Research Lab that many popular vacation rentals were already fully booked more than twenty days before the vacation. Looking at the booking channels, in Xi'an, platforms like Meituan and Tujia are mainly used. In Bortala in Xinjiang, Ctrip is more commonly used, and there are also many orders through Douyin. The ones that are really fully booked are mainly high - end vacation rentals and upper - middle - class vacation rentals in tourist areas.

There are different strategies for different customer groups. Urban residents are price - sensitive and always compare prices, even for a difference of just a few dozen yuan. Guests in tourist areas have higher purchasing power and are more willing to pay for the atmosphere and emotional value.

"Today's vacation rentals are actually operated according to hotel standards. They have the core of a hotel and the appearance of a vacation rental. Naturally, guests tend to choose vacation rentals." said Luo Ran. Yoga rooms, meditation rooms, and private media rooms that make guests have fun are the real highlight.

In daily operations, what annoys her the most are the "both - and" requirements of guests. They want both an individual space and experiences and not miss out on the standardization and convenience of a hotel.

"There are rooms designed as art spaces, and every extra stool would be a nuisance. But some guests basically have business travel needs and want to work with their laptops. They ask why there isn't even a table in the room."

Luo Ran was a bit at a loss: "We have projectors, nice facilities, and game devices for children. Hotels don't have these. Why don't we get praised for this even once?"

Although vacation rentals are popular, it's not easy to operate them. Even Luo Ran doesn't dare to relax.

In tourist cities, the seasonality is very strong. The income during the peak season has to sustain the whole year, and during the off - season, one has to rely on regular customers. The outside world only sees the "high profits" during holidays when room prices double or triple and ignores the long off - season when there are hardly any guests. Looking at the whole year, it's not certain that one will make a profit at all.

Moreover, vacation rentals need to be renovated every five years so that they don't look too old. "If guests check online and find that the vacation rental was renovated in 201X, the age will immediately put them off."

"2024 was probably the year with the fiercest competition. At that time, it seemed that everyone in the city was buying houses for vacation rentals. Every house was converted into a vacation rental. In 2025, the market started to clear, and a series of operators who couldn't survive closed their doors. Those who are still in business by 2026 usually have built up a stable customer base and a good reputation. These are the ones who are really competitive." said Luo Ran.

But the low entry barriers are constantly attracting new players, and the new players are by no means inexperienced - "They are still in the first generation, while others have already entered the second generation. In a few months, people with the third generation will start again."

Vacation rentals are constantly absorbing and evolving, and the products are getting better and better. Those who can't keep up with the pace will soon be left behind.

#02

Hotels are more afraid of competition among themselves

Chen Lang has worked in the Jinjiang Group for six or seven years and now invests in and manages a total of several dozen hotels. She also provides operational advice for colleagues.

Chen Lang told us that since this year, many hotels have performed worse in both occupancy rate and room prices than last year. Many mid - range rooms only reached their booking peak during holidays. Some branches had to lower prices and market the rooms to maintain the number of guests.

"Normally, vacation rentals can't take customers away from hotels. Only at tourist destinations do they compete with hotels." In her opinion, vacation rentals and hotels are not on the same track at all.

The fact that vacation rentals outperformed hotels in bookings during the May Day Holidays mainly involved high - end vacation rentals. "For budget small apartment - style vacation rentals, people don't have many options. They prefer standardized chain hotels because the hygiene is guaranteed."

She also admitted that consumers' needs are diversifying. "More and more people no longer want standardized products. They prefer vacation hotels with a tourist character and non - standardized brands to experience other emotional values. Ultimately, consumers are willing to pay for their own experiences. It has to look good in the photos, the experience has to be good, and it has to be different from that in a standardized hotel."

What really worries hotel operators, however, is the competition among themselves. Overcapacity is the root of all evils.

"The Chinese hotel industry is actually closely related to the real estate industry." said Chen Lang. "There are so many hotels on the market because there are so many houses. One has to use these houses somehow, so they are converted into hotels."

The three forces of the real estate industry, the pandemic, and the franchise wave have come together. "Since 2021, the number of hotels across China has increased by more than ten thousand, almost three times the normal market demand." At the same time, companies are cutting their travel expenses and replacing business trips with online work. The business travelers who once accounted for half of the hotel business are becoming fewer and fewer.

"All hotels look the same and really have no special features." said Chen Lang. "When you enter a chain hotel, you are actually buying a standardized product with a certain level of security. If there is a new hotel nearby, people will go there first."

Chen Lang has tallied up the numbers: A mid - range hotel with 80 to 100 rooms could achieve a monthly net profit of more than ten thousand yuan in good times, and in the best - case scenario, even more than twenty thousand yuan. Now it's only around ten thousand yuan. The costs are "already reduced to the minimum. If you lower them further, the hotel can no longer function normally." In her opinion, only about 30% of the hotels on the market can still achieve considerable profits.

Those who have to swallow the bitter fruits of overcapacity are mainly franchise partners. They hoped that the brand would provide them with customers and income. But the customers didn't come, and the management costs, the manager's salary, the central booking costs, and the mandatory purchases remained the same. "Most of these mid - range hotels opened in 2021 and 2022. So far, eight out of ten still haven't recouped their investment capital." said Chen Lang. In 2018 and 2019, one would have recouped the capital in three years, "because the market wasn't that big at that time".

It's even more difficult because franchise contracts are usually signed for ten years, while standardized products need to be renewed every four or five years. "Many hotels haven't recouped their capital yet, and if they then have to renovate with the brand, they simply can't do it." If you terminate the contract, you have to pay a penalty. If you hold on, you have to invest money every month. This dilemma is the real reason why hotel operators "can't sleep".

"Hotels are now in a transformation and selection phase." said Chen Lang. Only those who can survive this phase can move on to the next stage.

#03

The boundaries between categories are disappearing

The boundaries between vacation rentals and hotels are disappearing. When vacation rentals have to adapt to the standardization of hotels and hotels have to learn the experiences of vacation rentals, the question of "who beats whom" may already be outdated.

The "hotelization" of vacation rentals is a trend. "In the past, people generally thought that vacation rentals stood for individuality," said Luo Ran. "But to be honest, individuality that is not supported by standardization will ultimately fail."

There is also a system for standardization. In Tiantai, Zhejiang, the local government has introduced a service certification for "Tiantai Vacation Rentals", which consists of more than thirty specific indicators in the four dimensions of safety, hygiene, comfort, and uniqueness. Vacation rentals that obtain this certification can carry a unified regional brand logo. In Deqing, Zhejiang, China's first vacation rental management school has transformed service processes, reception rituals, and emergency handling into measurable standards. More and more operators are starting to take the professional qualification exam for "Vacation Rental Managers".

The "vacation - rentalization" of hotels is also accelerating. From rooms with theme movies to culture - IP hotels, from e - sports rooms to wellness resorts - operators are now selling scenarios, and the role of the room - sales manager has become experience planning. Some hotels put steam eye masks and mugwort plasters in the rooms, while others convert conference halls into professional theaters so that guests can also watch a play.

The reason why vacation rentals and hotels are approaching each other is that consumers no longer just pay for "a bed". This generation of consumers sees staying overnight as a way of self - expression and a lifestyle. Their needs are becoming fragmented, scenario - based, and emotional.

When the industry is in fierce competition, platforms start to re - define their roles: They want to be not only traffic collectors but also "stabilizers" of business development.

There have been some changes. In the past, the whole industry was characterized by "positive reviews". The number of reviews directly determined promotion and visibility. Operators were manipulated by guests, and every small problem could become a threat. To get a high rating, many operators gave out gifts, asked for praise, or even created fake reviews. The result was that operators over - exaggerated their actions and the service deviated from its original purpose.

Since the second half of last year, Ctrip has lowered the threshold for a high rating from 4.8 points to 4.7 points to encourage operators not to get caught up in a race for the number of reviews. At the same time, it has intensified its efforts against malicious reviews, professional review artists, and those who threaten with reviews to make money.

Meituan has also updated its review system. It uses AI to detect fake reviews and intercept malicious reviews. It extracts common problems and gives operational suggestions so that negative reviews become an "improvement list".

With the change of rules, differentiation becomes more pronounced. Operators whose service and experiences are not up to par are losing more and more orders. Those who really care about reputation and operation, on the other hand, are getting more opportunities.

Those who can survive in the future are neither "vacation rentals that look like hotels" nor "hotels that look like vacation rentals", but new types that can offer both safety and surprises.

This article is from the WeChat account "Zhengu Research Lab". Author: Jingling, Editor: Zhang Duo. Published by 36Kr with permission.