Mitchell Presnick runs Super 8 Hotels (China) Co. Ltd. The company has been growing fast in the China market and is quickly becoming one of the top economy hotel chains in the country.
What is your strategy for expanding the Super 8 brand in China?
We have a mixed model of ownership — franchise and self-owned. The number of our own operated properties is increasing; we are opening 25 properties — up from the five we currently own. In addition we offer a management service to franchisees, so we have three models — own operate, franchisee managed, and franchisee managed by us.
We are focusing on lower tier markets, we think this is where the growth will be — fourth and fifth tier markets are performing well. Also it is becoming cost prohibitive to open economy hotels in major cities. As Mao Zedong said , "The countryside surrounds the town".
Our geographic coverage is truly nationwide, from Urumqi to Xishaungbanna, from Inner Mongolia to Kunming. We have a property opening in Tashkar which is about as far west as you can get in China. Ours is a true national distribution policy, unlike some other brands that concentrate on regions such as Shanghai. Our pricing is strong in our market segment.
How have international brands such as Super 8 influenced the economy hotel marketplace in China?
One of the first things we have tried to be is a positive influence on the market. We have had a lot of interaction with the government departments that set the standards. We have given them examples of how things are regulated elsewhere — in North and South America and Europe, for example — and emphasized the need for good safety standards and for training standards. As an international brand we have a strong responsibility to China and to the industry — we are the international standard. We aim to set an example for other hotels — in a respectful way — working in areas such as safety. We work with non-branded hotels in areas such as English-training and how to receive foreign visitors.
We view everybody in the industry as working towards a common benefit and have a very good relationship with the other hotel groups and encourage them to keep the same standards of "safe and clean" and the same service levels. At the moment the economy hotel industry is going through a period of pre-consolidation. There are around 150 little chains of economy hotels with five to ten properties, however this fragmentation will not last forever and a number of strong players will emerge. There will be many targets for acquisitions and mergers.