Jinmao has started to operate its hotel business independently again.

Recently, Hyatt Regency Chongming Shanghai Jinmao has officially ended its cooperative relationship with Hyatt Group, renamed Shanghai Chongming Jinmao Yiyin Hotel, and is independently operated by the property owner Jinmao. For a hotel that has been in operation for many years, the brand transition is not a simple name adjustment. In the past, Jinmao entered the high-end hotel market relying on the brand influence of international hotel groups such as Hyatt. Now, with its self-owned brands including Jinmao Yiyin, Jinmao Joy, and Jinmao Pure gradually taking shape, this real estate enterprise is trying to transform from a hotel asset holder to a hotel brand operator.

From Hyatt to Yiyin, Jinmao Hotels Starts to Adopt a New Strategy

Hyatt Regency Chongming Shanghai Jinmao, which opened in 2014, was a typical project under the cooperation mode between Jinmao and international hotel brands. Rooted in the core area of Chongming Island, it relies on the local ecological advantages to focus on low-density resort formats, with complete supporting facilities for catering, conferences and leisure.

Since its opening, it has always been a popular choice in the suburban resort market of Shanghai, with an occupancy rate of over 50% on weekdays. During the years of cooperation with Hyatt, it has accumulated a stable customer base by virtue of Hyatt's brand influence, mature membership system and operational experience, and has maintained a good reputation especially in the fields of parent-child vacation and corporate team building in the Yangtze River Delta region.

The cooperation between Jinmao and Hyatt has a long history, and the two sides have in-depth cooperation in many high-end hotel projects in the past. The brand removal of the Chongming project does not mean that the cooperative relationship between the two sides has changed, but a specific attempt of Jinmao on the road of exploring independent operation.

The renamed Jinmao Yiyin after this transition has not carried out large-scale hardware adjustments, and most of the changes are focused on brand positioning and operation methods. Compared with the past of relying on international brands to attract customers, Jinmao hopes to further combine the ecological resources of Chongming to create resort products that better meet the needs of local and surrounding consumers.

Looking back at the development path of Jinmao Hotels, we can find that Jinmao did not try independent operation from the very beginning. Instead, it completed the layout of high-end hotels through cooperation with international hotel groups, gradually accumulated operational experience in this process, and finally began to build its own brand system.

As a real estate enterprise with central SOE background, Jinmao's hotel business started from cooperation with international brands. After more than 20 years of development, it has gradually completed the role transformation from a "pure property owner" to an "independent operator", and its self-owned brand matrix has gradually taken shape.

In 2007, the Grand Hyatt Hotel in Jinmao Tower opened, which became an important node for Jinmao to enter the high-end hotel sector. Relying on the core location of Lujiazui in Shanghai and the brand influence of Grand Hyatt, this project quickly established market awareness and became one of the representative projects in the domestic high-end business hotel market.

For Jinmao at that time, this was a choice more in line with the development stage of the industry. At that time, the high-end hotel market was still in a period of rapid expansion, and international brands had mature management experience, sales channels and membership systems, which could help new projects enter the market quickly.

On the other hand, for enterprises whose core business is real estate development, hotels mostly undertake the function of enhancing project value and urban image, and their operation is usually completed by international hotel groups.

At the same time, Jinmao has also accumulated its own hotel operation experience in the long-term cooperation process.

Around 2015, the Lijiang Jinmao project built relying on the resources of Jade Dragon Snow Mountain officially entered the market. Initially, it introduced brands under Hyatt Group for operation, and Lijiang Jinmao Yiyin Hotel has also become one of the important projects in the local resort market.

At that time, international brands played the role of establishing market awareness, building service systems and attracting high-end customers.

With the in-depth operation of the project, Jinmao also began to think about another possibility of destination hotels. Compared with urban business hotels that rely on location and standardized services to attract customers, the core competitiveness of destination hotels comes more from natural resources, cultural experiences and non-standard travel content.

Therefore, the Lijiang project gradually weakened its dependence on the international brand standard system afterwards, and explored product expressions more in line with the attributes of the destination around local resources such as Jade Dragon Snow Mountain and Naxi culture.

Later, the Lijiang Jinmao project was further upgraded to the first project under Jinmao's self-owned brand "Pure", Lijiang Jinmao Pure Snow Mountain Hotel. The hotel creates an immersive travel experience around the snow mountain landscape, and strengthens the difference between destination hotels and ordinary resort hotels through snow mountain viewing, nature exploration, local cultural experience and other contents.

From the initial introduction of international brands, to subsequent attempts at brand adjustment, and then to the exploration of independent product positioning, the Lijiang project made Jinmao gradually realize that hotels are not only property supporting facilities, but also can become an important entry point for enterprises to participate in destination operation.

This change further accelerated around 2021, and Jinmao Hotels entered a "strategic transformation period", with the core direction of getting rid of dependence on international brands, building its own hotel brand matrix, and taking the path of combining light and heavy assets with light asset operation as the main focus.

In the same year, Jinmao held a brand conference in Sanya, launching five self-owned hotel brands at one go, covering different positioning and formats, forming a relatively complete brand system.

At present, Jinmao has formed a brand layout covering different scenarios: Jinmao Joy meets the urban business and complex accommodation needs, Jinmao Yiyin focuses on natural resources and resort scenarios, and Jinmao Pure further explores the direction of high-end boutique travel.

In order to support the development of self-owned brands, Jinmao has also built a hotel commercial management platform, which is responsible for the construction of brand standards, operation systems and membership systems. From Hyatt Regency Chongming Shanghai Jinmao to Jinmao Yiyin, what has changed is not only the name of the hotel, but also the change of the relationship between Jinmao and its hotel business.

In the past, Jinmao mostly relied on international hotel brands to complete product implementation and operation management. Now, it is trying to take more product design and operation decisions into its own hands.

Why Has Jinmao Been Trying to Operate Hotels Independently

Jinmao's choice of independent operation is not a sudden abandonment of international brands, but a rational choice after the change of its own development stage.

After more than 20 years of accumulation, Jinmao has possessed the basic conditions for independent operation. At the same time, the changes in the market environment have also made independent operation a choice that better fits its development needs.

On the one hand, through years of cooperation with international brands, Jinmao has fully mastered the operation standards, management processes and customer service logic of high-end hotels, cultivated a group of professional operation teams, and possessed the ability of independent operation.

On the other hand, with the oversupply of high-end hotels in China, the "halo effect" that international brands bring with their own traffic is weakening. In addition, the annual fixed brand management fee is changing from a "value-added service" to a "rigid cost", and the economic account of independent operation is becoming more and more cost-effective.

Therefore, Jinmao began to try to establish its own hotel brand system, hoping to find corresponding products for different asset types and achieve accurate matching between brands and assets.

Jinmao Joy mainly undertakes urban accommodation scenarios, focuses on core urban complexes, benchmarks against international five-star business hotels, and targets business travel, conference and exhibition customers. At present, it has been launched in Ningbo, Jiangyin and other places.

Among them, after the opening of Ningbo Jinmao Joy, the average room rate is stable at about 700 yuan, and the average occupancy rate can reach more than 60%, achieving good operating benefits.

Jinmao Yiyin explores more of the natural resources and destination resort market, focusing on the product form of quiet luxury and low density, adapting to the needs of parent-child leisure, health care and travel. The Jinmao Yiyin converted from Hyatt Regency Chongming Shanghai Jinmao and Taicang Jinmao Yiyin Rose Manor are the core landing projects of this brand.

Jinmao Pure further extends to the direction of high-end boutique travel, relying on scarce landscape resources to create an immersive resort experience. The success of Lijiang Jinmao Pure has also verified the feasibility of this brand positioning.

These brands do not simply copy the international hotel model, but carry out product design around Jinmao's own urban resources and cultural tourism resources, which is more in line with the needs and consumption habits of domestic customers.

Different from the standardized and global positioning of international brands, Jinmao's self-owned brands pay more attention to local experience, can combine the characteristics of the project's location to create differentiated products, and avoid homogeneous competition.

For example, in the product design of Jinmao Yiyin, local natural landscapes and cultural features will be integrated to launch targeted leisure experience projects, while Jinmao Joy will combine urban business scenarios to optimize the details of conference supporting facilities and business services, which is more in line with the needs of domestic business customers.

The brand transition of Chongming Jinmao Yiyin is a direct embodiment of this idea. In the past, the model of Hyatt Regency Chongming Shanghai Jinmao was very clear: Jinmao provided properties and hardware supporting facilities, and Hyatt provided brands, operation systems and membership channels. The two sides had a clear division of labor and achieved rapid development in the initial stage.

In the early stage of the hotel's opening, with the help of Hyatt's brand influence, the occupancy rate on weekends remained above 80% all year round, and the average room rate was about 900 yuan, making it a popular project in the suburban resort market of Shanghai.

However, with the change of the market, the standardized operation model of Hyatt has gradually been unable to adapt to the characteristic needs of the Chongming project, and the expenditure of brand management fees has also occupied a certain operating cost.

Now, Jinmao hopes to define products and operation experience by itself, combine the ecological resources of Chongming to create more targeted resort products, reduce dependence on international brands, and optimize the cost structure to improve asset returns.

After Independent Operation, How to Build a "Golden Signboard"

For Jinmao, moving from cooperation with international brands to independent operation does not mean that the path becomes simpler.

While independent operation brings greater autonomy, it also brings new challenges. Jinmao needs to continue to invest in brand building, channel construction, talent training and other aspects to realize the sustainable development of self-owned brands.

In the past, under the cooperation mode of international brands, hotels needed to follow the mature standard system of the brand side, and there were relatively clear specifications from product design, service process to marketing system.

This model can reduce the uncertainty in the initial stage of hotel opening, but it also limits the owner's independent adjustment of products.

After independent operation, Jinmao can redefine hotel products according to the location of different projects and the needs of customer groups.

Taking Chongming Jinmao Yiyin as an example, in the past, the hotel relied more on the Hyatt brand to attract resort customers. After the brand transition, Jinmao can further strengthen characteristic scenarios such as natural experience, parent-child vacation, health care and travel around the ecological resources of Chongming, so that the hotel positioning is more closely integrated with the destination attributes, which is also the biggest attraction of self-owned brands for real estate enterprises.

Compared with traditional hotel groups, real estate enterprises have richer urban resources. Hotels are no longer just independent accommodation projects, but can form linkage with commercial, residential and cultural tourism projects.

For Jinmao, its commercial complexes, urban operation projects and cultural tourism resources have created more scenario possibilities for hotels.

For example, urban hotels can form passenger flow interaction with commercial spaces, and destination hotels can develop experience products in combination with local resources.

Compared with simply relying on room revenue, this operation mode of "hotel + urban space" is also an important reason why real estate enterprises try to operate hotels independently.

But having more autonomy also means taking more operational pressure.

First, there is a gap in brand awareness. After decades of global layout, international hotel groups have formed extensive market awareness and stable overseas customer channels.

Among Jinmao's self-owned brands, only Jinmao Pure has gained popularity by relying on the scarce resources of Lijiang, and the national awareness of brands such as Jinmao Yiyin and Jinmao Joy is not enough. When ordinary consumers choose high-end hotels, they will still give priority to international brands.

Second, there is pressure on customer acquisition channels. After losing the global distribution system, overseas booking channels and global customer diversion of international groups, independently operated hotels need to increase investment in OTA promotion, local marketing and community operation to fill the passenger flow gap. In particular, business hotels are more dependent on customer acquisition channels.

Third, the brand replication capability remains to be verified. The success of Jinmao Pure largely depends on the unique landscape of Jade Dragon Snow Mountain. Whether this model can be replicated to other projects with non-scarce resources still needs market test.

Whether Jinmao Yiyin and Jinmao Joy can maintain stable product experience and service quality in different cities and different market environments and realize large-scale replication is the key to determine the success or failure of Jinmao's independent operation strategy.

Jinmao's transformation from relying on international brands to deploying independent operation is not an isolated case, but a common phenomenon in the domestic state-owned real estate hotel industry in recent years. More and more state-owned real estate enterprises are gradually reducing their dependence on international hotel brands, and turning to cultivate their own brands and take the path of independent operation.

For example, OCT Hotels relies on its own cultural tourism scenic spot resources to gradually upgrade its self-owned brands such as Jiatu and Ritu, focusing on the integrated mode of "hotel + park" and "hotel + local cultural tourism", deeply binding hotels with the formats of scenic spots and reducing dependence on international managers. At present, it has formed a complete brand system covering high-end, mid-range and economy segments.

As a benchmark of local state-owned hotels, Lingnan Hotels, deeply rooted in South China, has formed a mature high-end brand matrix including Garden Hotel and Lingnan Oriental. Relying on localized service concepts and operation experience, it continues to expand across the country and is always ranked among the top of the global hotel group list. Its independent operation mode has also been widely recognized by the market.

However, independence does not mean success. Some local state-owned and real estate hotels must learn from the lesson of "wavering strategy".

In the early years, Country Garden operated hotels, relying on international brands for a while. When it made some progress and felt it was capable enough, it began to build its own brands. When the brand effect did not meet expectations, it began to cooperate with international brands again.

Later, it independently established Fengyue Hotels & Resorts, trying to achieve professional operation, but it still "changed repeatedly" on whether to build its own brands or cooperate with international brands.

As the real estate economy enters a rational era, after years of hotel experiments of Country Garden, the only brands people remember are still several "cooperative brands", and the so-called matrix has almost no brand value. Such cases are still worthy of reference for other brands.

From completing the construction of hotel assets with the help of international brands to trying to establish self-owned brands, real estate-based hotels are experiencing a role transformation.

For Jinmao, the brand transition of Chongming Jinmao Yiyin may only be a node. What really determines the value of its independent hotel business in the future is not how many new brands it adds, but whether it can establish a stable system of product R&D, operation management and brand replication.

From this point of view, Jinmao must have its own hotel brand with a real golden signboard as soon as possible, which is the "ultimate path" for future development!

This article is from the WeChat official account "Space Insight", written by Li Jiaru, and authorized for release by 36Kr.