Sanya B&B operators: The market is indeed difficult this year. Some B&B prices have dropped from 500 yuan to 180 yuan.
2024-07-26
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Source｜Phoenix.com "Eye of the Storm"
Author｜Silence
Recently, an initiative jointly drafted by the Hainan Hotel and Catering Industry Association, the Hainan Cooking Association and the Hainan Hotel and Catering Industry Trade Union Federation has set off a huge wave in the tourism industry.
The proposal clearly pointed out that since the second quarter of this year, Hainan's hotel enterprises have experienced a sudden change, with their operating conditions declining sharply. Even those hotels that have barely survived are facing a difficult situation of involution, sparse customer flow, and widespread losses.But strangely, the article was quickly deleted, and the Hainan Hotel and Catering Association and the Hainan Cooking Association once again issued a statement saying that "due to lack of consideration, there is a problem of misinterpreting the phenomena of individual companies in the industry as the general situation of the industry", and "now with the arrival of the summer peak season, the hotel booking rate in key tourist cities and counties in the province such as Haikou and Sanya has shown a steady upward trend, and the hotel and catering industry in our province will also usher in a peak in occupancy and a consumption boom."Behind the reversal of caliber, what is the real situation of Sanya hotel and homestay practitioners? Phoenix.com's "Eye of the Storm" talked with Hu Fei (pseudonym), a homestay practitioner in Sanya, Hainan. He mentioned that the current market situation is indeed difficult. First, Hainan has entered the off-season for tourism, and the number of tourists has dropped significantly. Second, the number of hotels and homestays has increased significantly in the past year, resulting in serious internal competition in the industry. He also said that the current Sanya hotel and homestay industry has not yet reached the most difficult time.The following is his own account, with some deletions.Can't sell at a high price
I have been running a homestay in Sanya for ten years, starting with Qingshui Bay. After the concept of the free trade port emerged, I met my current partner, and together we opened six homestays in Sanya, one of which is an urban apartment in the city, and five are located in rural homestays on the West Island.Having run a B&B business for so many years, I feel that this year's market is even more difficult than during the pandemic. We have to compete not only on price but also on service. Last summer, our room prices were basically around 300-400 yuan, but this year they have dropped sharply to 200 yuan, a drop of nearly one-third. Moreover, this price also needs to include services such as breakfast, travel guides, and photo shoots.West Island
It is obviously more difficult to acquire customers than last year. In the past, we acquired customers on some traditional travel websites and platforms, but now it is no longer possible and we have to start using new media. We specially formed a team to do live broadcasting, and the cost of this alone increased by more than 300,000 yuan a year.Thanks to these measures, the occupancy rate was barely maintained at the same level as last year. Among the five rural B&Bs, the best one had an occupancy rate of 90%, while the worst one had an occupancy rate of only about 40%.Why is it so difficult to acquire customers?On the one hand, it is the off-season for tourism in Sanya during the summer vacation. At this time, many tourists prefer to travel to Yunnan, Lijiang, Tibet and Xinjiang, and not many choose to come to Hainan. In addition, people tend to pursue cost-effectiveness when traveling now, and save as much as possible.On the other hand, the number of hotels and B&Bs in Sanya has increased dramatically, leading to serious internal competition in the industry. In January and February 2023, the epidemic had just been lifted, and people began to travel after three years of being cooped up. At that time, the business of hotels and B&Bs was extremely hot. Take our B&Bs for example, we were able to achieve 100% occupancy in January and February 2023.Seeing this, many people have joined this industry, wanting to get a piece of the pie. Take Xidao as an example. When we first started in 2021, there were only a dozen B&Bs on the island, but now the number has surged to more than 150. There are only more than 1,000 residents on the island, which means that one-tenth of the houses on the island are used as B&Bs. You can imagine how fierce the competition is.There is no choice but to lower the price. Because as long as the room is occupied, no matter how low the price is, you can make some money, otherwise it is pure loss. At the beginning, many people couldn't change their mindset. For example, I have a friend who used to insist that he would never sell a room for less than 500 yuan, but now he starts selling it at 180 yuan. Moreover, on Xidao Island, some B&Bs with similar areas to ours have dropped to 150 yuan or even 100 yuan.It is not just the B&B operators who are anxious, but also the hotel operators. Some big hotels have hundreds or even thousands of rooms, and the large base leads to lower occupancy rates. Some hotels used to sell rooms for 800 or 900 yuan per night during the peak season, but now the price has dropped to 300 or 400 yuan. There is no way, the competition is too fierce.But I think the price reduction is a good thing for the Sanya tourism market. Before, people always said that Sanya was expensive, which discouraged many potential tourists. After the price reduction, it may attract more tourists in the future. And I don’t think it’s the hardest time yet.Now is not the hardest time
In the B&B business, decoration is a major event. The contracts we sign with landlords are usually for 15 years, and the decoration costs of a single B&B are as high as 2 million. In total, we have invested more than 13 million in our five B&Bs.It is not easy to earn back all these investments in 15 years. The profit margin of the B&B industry is not high, and a profit margin of 30% is already very good. We are trying our best to do our best, but this is the level we can reach. I feel very stressed just thinking about it.Even if you can achieve a turnover of 1 million per year, the profit is only 300,000. The three of us share it, so each person only gets about 100,000, which is almost the same as a salary. Sometimes it really feels like I am looking for something to do for myself.This industry is really "binding people". For example, our homestay will be equipped with three staff members: store manager, housekeeper and cleaner, but if I am not there, the service and effect will definitely be much worse. As a result, I am now separated from my family. They stay in their hometown in Henan, while I can't go back to Sanya. I feel mixed emotions.Moreover, running a B&B also involves various risks of force majeure. For example, in 2022, we did not do much business for the entire year. July and August of that year were originally the busiest times for business. In July, our B&B was fully booked, but because of the sudden outbreak of the epidemic in August, we had to cancel orders worth hundreds of thousands of yuan.Many hotel and homestay practitioners now find it difficult because they have never experienced such a stage. When they first saw the hot market, their expectations were too high. When the market fell, they found it difficult to accept it, which is understandable.According to the current situation, after the summer vacation this year, I think many B&Bs will choose to sell, transfer or directly close down. Because of the continued low occupancy rate, many people who have just entered the industry may have a mental breakdown, which is also unavoidable.But this is not the most difficult time for B&B hotel operators. In fact, the most difficult time should be November and December, when winter has arrived in the north.Generally speaking, Sanya should be in its peak season after winter, when many people come. However, Sanya's customer groups are different. For holiday-type and daily-rental B&Bs like ours, we receive a group of guests who may come to play for 5 days, 7 days or half a month.However, many tourists who come in November and December every year want to spend the winter in Sanya. Some of these people are owners who have already bought houses here, and some are long-term tenants who may rent a house for one or two months during the winter. Although there seem to be many tourists, they are not our customer base.At that time, some practitioners will certainly be more anxious, but there is no point in being anxious. There are people who make money in every industry. It is better to look inward and do a good job in operations and services. 👇【 Popular activities recommended 】👇"Phoenix Star" listed company selection votingstart, welcome to vote for your favorite company.The winners will be announced at the Phoenix Bay Area Financial Forum on September 2.The selected companies and institutions will have the opportunity to be promoted globally as successful business cases through Phoenix Satellite Television Group's omni-media communication matrix and related cooperation channels.
