The Strategic Management of Economy Hotel in China (Proposal) Essay

The Strategic Management of Economy Hotel in China (Proposal) - Essay Example In the hotel industry a similar approach should be used. This study focuses on a specific part of the hotel industry: the low budget hotels. The strategic management framework of the sector’s hotels is explored by referring to the case of a specific country: China. The above country has been chosen because of the following two reasons: a) because of its position as a major competitor in the global economy and b) because of its significant achievements in regard to the development of the hotel industry. This study aims to show that the strategic management practices used in the sector’s hotels in China have a key role in the industry’s development; the improvement of certain of these practices, as suggested in the study, could secure the sector’s growth, a fact that would highly benefit the country’s economy. Introduction Economy hotels, as businesses, have been highly expanded worldwide. The strong financial pressures developed in the international market especially from 2007 onwards had a key role in this phenomenon. In addition, the development of technology has led to the radical decrease of distance between regions; travelling for covering various needs, including business, education or health, has become highly popular at the level that the time involved can be quite short. The establishment of hotels of low budget has been considered as a necessity so that the housing needs of an area’s visitors are covered at low cost; such perspective has been proved to increase the area’s popularity, as a tourist destination but also as a business center. Under these terms, the growth of economy hotels sector can be considered as expected. Countries that aim to secure their economic growth have emphasized on the development of the particular sector; China is an example of this trend. As in other countries, in China also, the sector’s rate of growth is not standardized; for example, during the recent global recessi on the profits for the hospitality/ tourist industry in China were reduced (Chon et al. 2013). This study aims to help to identify these problems so that solutions are retrieved based on the low cost philosophy that characterizes the sector’s businesses. Research Background and Motivation China is considered as one of the most powerful economies worldwide. The flexibility of the Chinese economy seems to be its major advantage. Indeed, the growth of China is not based on strict and standardized economic rules; rather, emphasis is given on innovation and the continuous monitoring of market trends (Freed 2011). Economy hotels have become quite popular in markets worldwide. The growth of the sector is indicated in the figures/ data included in the table of Figure 1 below. Figure 1 – Growth of economy hotel sector in China, up to 2012 (Shen 2013, p.1) The willingness to identify the strategic management needs of the economy hotel industry in China has been the key motivatio n for the development of this study. According to a recent report the economy hotels sector represents just 30% of China’s hotel industry, a percentage though that it is expected to be significantly increased in the future (PR Newswire 2013). At the same time, the competition in the sectors seems to be limited, as about 47% of the sector’s hotels are owned by three brands: ‘Home Inns Group, Hanting Inns and Hotels and 7 Days Group Holdings’ (PR Newswire 2013). The strategic management characteristics of the sector should be identified and