Why do established international hotels "flop"?

The head of Savills Hotel Department said that there are three main reasons for the "flop" phenomenon of established international hotels such as Hilton and Sheraton. First, when the contract expires, the owner intends to carry out brand transformation or other transformation plans. "Hotel management contracts generally have a signing period of fifteen or twenty years. After decades of development, in recent years, it is the node where many international brand hotel management contracts expire. "

The second is that the maturity of the market makes some owners have the confidence to operate and manage independently. Because of the rapid development of hotels in China in recent ten years, many owners have grown up with these international brand hotels, and their hotel management ability has been greatly improved during the execution of the contract, so they will also consider their own management. Thirdly, more and more tourist channels are available, which challenges the competitive advantage of international brands. Signing an international hotel brand can bring rich customers, including international and domestic customers. However, with more and more favorable factors in the market environment, the customers brought by international brand hotels are slowly changing, and domestic brands are beginning to cooperate and compete with some international distribution and sales systems.

At present, with the hotel market in first-and second-tier cities becoming saturated, the market appears more in the form of decoration or flop, and more new hotel projects are concentrated in third-and fourth-tier cities. From the perspective of investment, if international brand hotels settle in third-and fourth-tier cities, it is likely that high investment will bring low returns.