China’s Jin Jiang Starts Tidying Up by Rebranding

Main Photo: The 7 Days Hotel in Vienna

Date: November 2020

Locations: Global

Names: So many… Hôtels & Préférence, Royal Tulip, Golden Tulip, Campanile, Kyriad, Tulip Inn, and Première Classe

No. of Keys: TBA

Owner: Jin Jiang

Buyer: Chinese hospitality conglomerate Jin Jiang has announced its Louvre division will start rebranding several of its French hotels. The move is an indication that the many-armed group is slowly starting to rationalise its holdings. The company, which claims second position in global hotel group rankings, went on an acquisition spree in the last few years, giving its substantial presence in European markets, alongside its established Chinese business.

In Europe, it bought Groupe du Louvre and, with an investment partner, Radisson; in China, it acquired Plateno Group and Vienna Hotels Group; while in India, it also acquired Sarovar.

In France, its Louvre group has a major presence, with 1,180 European hotels under brands including Hôtels & Préférence, Royal Tulip, Golden Tulip, Campanile, Kyriad, Tulip Inn, and Première Classe.

However, in contrast with, say, the Marriott/Starwood merger, Jin Jiang has been slow to look for economies of scale, the tidying up of brand presence, or cross-selling opportunities.
Louvre’s Campanile and Kyriad brands will grow by reflagging ten Plateno properties, in Vienna, Salzburg, Ansfelden, Munich, Leipzig, Berlin and Venice.

Until now, the hotels have been running under Plateno’s 7 Days Premium brand, and all have between 95 and 200 rooms. “This development enables us to uphold and expand our brands across Europe, despite a difficult global context, while establishing our leadership in the European hotel industry. It is a great opportunity for our strategic brands, such as Campanile which we are positioning in the major European cities and transport hubs,” said Pierre-Frédéric Roulot, CEO Louvre Hotels Group.

The move looks set to remove the 7 Days Premium brand from the European landscape. And at the same time, it sets a new standard of property for Campanile, which in earlier generations was wedded to motel-style accommodation, with external walkway corridors. “With this acquisition, we are taking over hotels in strategic locations such as Leipzig, Munich, and Vienna, thus further expanding our European network to best meet the expectations of both our business and leisure customers,” said Andreas Tscherning, COO Louvre Hotels Group.

Jin Jiang acquired a majority stake in Plateno in 2015, adding to its holding with a further stake purchase in 2017. The disruptive Asian group had created up to 17 different brands, built a major membership platform, and had branched out of China into Europe, Indonesia, the Philippines, Sri Lanka and the Maldives.

At the time of the 2015 deal, Alex Zheng, co-chairman of Plateno declared: “We have a dream: that in every beautiful destination in the world, there will be a Chinese-run hotel, so that Chinese customers will always feel a sense of belonging wherever they go and will hear familiar greetings in Chinese and be served a warm bowl of congee whenever they want.”

While it looks to be rationalising its international brand holdings, Jin Jiang is still running with the 7 Days brand in China, where it has a substantial portfolio. And also still alive is a 2014 agreement signed between Plateno and Hilton, to grow the Hampton brand in China. A target of 400 properties in the country was set, and to date the licensing agreement has seen 154 Hamptons opened.

At the end of 2018, Jin Jiang completed its acquisition of the Radisson group. In mid-2019, the first step towards linking Radisson with the Chinese market came, as the Radisson Blu in Frankfurt was announced as the group’s first co-branded property.

At the time, Radisson CEO Federico Gonzalez Tejera commented: “We are keen on offering the leading hotel brands from Radisson Hotel Group to guests, owners and talent around the world. The launch of the first co-branded hotel with Jin Jiang International is an important milestone in reaching this goal. The co-branded hotels have a bright future, with the potential to extend to more than 30 properties across EMEA – including five Radisson Collection hotels in key destinations for Chinese travelers.”

In addition, 53 Radisson properties were added to the WeHotel Platform, Jin Jiang International’s global hotel booking platform that boasts 130 million members.
Jin Jiang also retains a stake in Accor, where it is the largest shareholder with 13% of the shares, and 17% of voting rights, as of June 2020.

Jin Jiang is not the only Chinese group with an interest in Accor: Chinese super budget operator Huazhu also holds 2.9% of Accor’s shares, in a cross shareholding which sees Accor with 5.8% of Nasdaq-listed Huazhu’s shares. The latter pair are working together to develop Ibis branded hotels in China.

HA Perspective [by Chris Bown]: It’s not a big deal, reflagging the 7 Days properties in Europe into more locally recognised group brands. But it’s a start. After their spending spree of the last few years, Jin Jiang is a massive beast. But it remains many headed, a sprawling empire with a broad portfolio of many parts, under around 30 brands, most still running under their old order of management.

Call it Chinese walls, if you will, but if you go to the Radisson website and fail to find the Radisson branded hotel to suit your needs in France, you won’t be offered a Louvre portfolio alternative. That’s indicative of how this group is missing out on cross-selling opportunities, just within a continent.

But what about cross-continent? When international travel gets going once more post-pandemic, it would appear the Chinese will be at the forefront, their economy rising ahead of those in the west. Already, flight levels domestically have returned to previous levels, while hotels in the country are also substantially back to previous demand levels.

So, if they’ve got any sense, the European arms of Jin Jiang should be beefing up their offer to those Chinese travellers. Get the congee warming.

Additional comment [by Andrew Sangster]: The key components of China’s next five-year plan were unveiled last week. The focus this time around is on quality rather than quantity.
HSBC said the key objective was about expanding the middle class to stimulate domestic demand. In addition, the bank said that opening China to the world was also important. Both these foci will help accelerate travel and tourism demand.

The previous five-year plan was focused on manufacturing, moving away from being the world’s factory towards the production of higher quality goods. A focus on domestic demand for the latest five-year plan, the 14th, should see less emphasis on manufacturing. There will be further economic and policy announcements over the coming months when it will become clearer how much support the travel and tourism sector will receive explicitly and implicitly.

But Jin Jiang, and to a lesser extent Huazhu, ought to be big beneficiaries of the switch in Government policy.

THPT Comment: China is a law unto itself, in many ways…can’t really add to the insight from our friends at Hotel Analyst.

First Seen: Hotel Analyst

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