ChinaTravelNews – The “China Hotel Alliance” was officially formed on July 6, comprising Celebrity City Hotels, Huatian International Hotels, New Century Hotels and Resorts, New Beacon International Hotel, Shuguang Hotel Group and Guangdong Hotel Management Holdings.
Members of the alliance aim to share loyalty member resources and allow customers to redeem bonus points at any alliance hotel, as well as provide services to other alliance members.
The alliance will form an independently operated third-party online company, and the platform is a sign that traditional hotels are embracing e-business and are in the cusp of a complete transformation with an open mindset in sharing customer base.
Benefits for loyalty members
The alliance said the Chinese hotel industry is highly fragmented with each hotel group developing their own regional turf with very little cooperation with other players. For example, New Century dominates the market in Zhejiang province while Huatian Hotels controls Hunan province and Celebrity City Hotels is in Chengdu.
The alliance will change this and allow the loyalty members of one member hotel group to enjoy full membership benefits and bonus points when staying with another hotel group member of the alliance in other regions.
Benefits for hotel alliance members
The alliance will provide tools to its hotel members for comprehensive loyalty member service functions, including real-time online booking at members’ prices, inter-alliance loyalty member interactive functions and loyalty member point conversion functions.
The alliance will integrate members’ central reservation system (CRS) and property management system (PMS) to develop a shared system.
The alliance also plans to include other business platforms for creating values for memberships, procurement, operational resources sharing, a training center and online media.
The alliance will have a flexible entry and exit policy and will set up regular CEO meetings of core members to resolve issues that may arise from the alliance’s operation.
Three year growth plan
The alliance describes itself as “an organization that brings together six major hotel groups that have a total of 250 mid-range and luxury hotels and 75,000 rooms. The alliance will also work closely with Tencent, Alitrip, Alipay, Jointwisdom and TravelSky in all areas. We hope to expand to include more than 50 mid-range and luxury hotel groups within three years and expand our network to cover 1,500 hotels serving over 50 million loyalty members.”
Slim chances for success?
Hotels forming alliances is not new, and there are overseas example, such as Roomkey.com, formed in 2012 by six international hotel groups, to counter rapid expansion of OTAs. However, Roomkey.com failed to establish a clear business model or to attract other independent hotels into its fold. Its system also lacked fairness and transparency, which has led to it falling by the wayside in just three years.
China Hotel Alliance may also face a similar fate. One industry observer pointed out that every hotel group has its own direct sales system and would be cautious in putting up their core resources in a loose alliance. Without these quality resources, the alliance is doomed to fail, much less compete against OTAs.(Translation by David)
