The report, exclusively released by Meadin Tourism Academy, is an analysis report written according to data statistics from Meadin Brand Index.

　　Chapter 1 Introduction

　　1.1 Introduction of Meadin Brand Index (MBI)

　　Meadin Brand Index (MBI) is released exclusively by Meadin.com, providing index data that reflect the brands (including relative brands of hotels and suppliers) influence for a period of time. The data is significant for enterprises and relevant industry personages, analyzing brand communication and marketing management. The index mainly analyzes brand influence from three dimensions: the user's influence, the media influence and industry influence. It is a data analysis service free of charge, which is provided by Meadin.com through Meadin Brand Index Monitoring System (MBIMS), independently developed by Meadin Tourism Academy. Meadin.com draws lessons from the domestic and foreign advanced competitiveness evaluation system, combine with the reality and expert argumentation, eventually form the existing index system. After repeated testing of the relevant data processing method and the index calculation method, the data are more scientific and reasonable.

　　MBI calculation formula: MBI=a*UI+b*MI+c*HI

　　Note: MBI refers to Meadin Brand Index; a, b, c separately represents weighting coefficient in the system.

　　UI(User Influence)

　　User influence is reflected by retrieval frequency of brand keywords in the China’s mainstream search engines for a period of time. The data are obtained through scientific analysis, calculation and weighting by MBIMS, which reflects the users’ attention for brand keywords.

　　MI(Media Influence)

　　Media Influence refers to the number of news reported by major Internet media which are related to the brand keywords. The data are obtained through scientific analysis, calculation and weighting by MBIMS, which reflects the media’ attention for brand keywords.

　　HI(Hotel Influence)

　　Media Influence refers to the number of news reported by tourism or hotel industry media which are related to the brand keywords. The data are obtained through scientific analysis, calculation and weighting by MBIMS, which reflects the industry’ attention for brand keywords.

　　How does MBI do the calculation?

　　The calculation is based on MBIMS (Meadin Brand Index Monitoring System), which is independently developed by Meadin.com. Targeting industry-relevant hotel and supplier brands, the system unremittingly and monthly keeps tracing Meadin.com, China’s major search engines and millions of netizens’ Internet behaviors on the database websites from other industries, sorting IP attributes of the brands’ potential users or actual users, collecting data from the aspect of user influence, media influence and industry influence.

　　Meadin Tourism Academy reviews and proofreads the raw database of the brand index, count up effective attention proportion by MBIMS, and eventually obtain the data of MBI through weighting calculation. The MBIMS also sorts according to the same category brands and ranks in accordance with effective attention proportion, reflecting the brand influence comprehensively.

　　Nouns explanation

　　Brand names: the names of hotels or suppliers. The users are able to click the brand names or search a certain brand name on the new-opened window of Meadin Brand Index.

　　Rankings: MBI’s monthly rankings of hotels or supplier brands in the corresponding category.

　　Trend: the trend of rising or falling compared to the monthly ranking of hotel or supplier brands last month.

　　Full List: the users are allowed to click the Full List button, entering the research channel index page to check complete situation of the brand ranking.

　　Rising ranking: rising numbers of the monthly ranking of hotels or supplier brands last month

　　Fastest rising brand: hotels or brands that have moved up fastest compare to last month

　　Attention board of brands: brands with the largest numbers of clicks on the brand detail page.

　　Brand Logo: the LOGO of hotel or supplier brands.

　　Graphs of brand index: graphs that reflect the MBI’s data changes of hotel and supplier brands.

　　News: relevant news about hotel or supplier brands.

　　Specials: relevant brands’ specials of hotel or supplier brands.

　　1.2 Report Introduction

　　Report of China’s Hospitality Industry Brands Development, exclusively released by Meadin Tourism Academy, is an analysis report written according to data statistics from Meadin Brand Index. The report made a comparative analysis among four types of brands including international hotels, China’s domestic hotels, economy hotels and mid-range hotels.

　　The annual report consists of five parts: 1. Background introduction to Report of China’s Hospitality Industry Brands Development 2013. 2. Analysis of prominent hotels from the four types of hotels. 3. Analysis of relevant factors affecting brand development. 4. Forecast of hotel brand development and industry development trends in 2014. 5. Conclusion

　　Chapter 2 Development of China’s Tourism and Hotel Industry 2013

　　2.1 Overview of China’s Hospitality Industry Development 2013

　　2013 is a year full of challenges and opportunities for Chinese hotel industry. Since the beginning of the year, the hotel industry has suffered from the government frugality campaign and has been inundated with news of closure, ratings shedding, downgrading and transformation, which was all due to the CPC’s crackdown on officials’ extravagance.

　　The CPC’s austerity measures have taken a toll on the hotel and catering industry. The business turnover in the hotel industry has declined 30%. According to the statistics released by China Tourist Hotel Association (CTHA), the revenue per available room (RevPAR) in five-star hotels has dropped by 11% year on year for the first half of 2013, 7% in three-star hotels and 6% in four-star hotels. The average revenue generated by the catering businesses has dropped by 17% year on year in four-star hotels, 15% in three-star hotels and 11% in five-star hotels, while the revenue generated by MICE businesses has decreased 21% year on year in four-star hotels, 17% in five-star hotels and 15% in three-star hotels. The third quarter report by CTHA revealed that the earnings have slipped year on year for Chinese domestic and foreign-funded luxury hotels.

　　Under the stimulus of economic policies and market conditions, all the hotel brands have adopted different strategies.

　　(1) High-end hotels adapt to the masses

　　In the end of 2013, many luxury hotels and year-end celebration planners received few orders from state-owned enterprises and government agencies due to the government frugality campaign.

　　Given the circumstances, some high-level hotels have tried odd turnaround plans in order to survive, such as “shedding”, “downgrading” their ratings and “transformation”. Some have adapted to the masses, although high-end hotels have always been considered luxury and rarity. In 2013, more and more high-end hotels began their popularization in ways of promotion, special offers and group purchase in order to capture their market share.

　　Among these hotels, many were international upscale hotels. Compared with Chinese domestic-funded hotels, foreign-funded hotels were slightly better, but also had a bad year. Special offers and discounts of high-end hotels can be seen in many group buying websites, which was very rare in the previous years. According to statistics of group purchase, hotel and travel business has increased by CNY￥1.65 billion to CNY￥3.15 billion for the first 11 months of 2013, up 90.6% from the previous year, which has also become the third group buying item after food and entertainment.

　　Some experts hold different opinions for the popularization of high-end hotels. They think hotels should consider their sustainable development. Popularization in the short period can guarantee the profits, but not a wise move in the long run. First, each hotel has its own market share. Special offers and discounts cannot maintain the consistent increase of market share. Second, each hotel has its own operating costs. Too much discount can damage a hotel brand image. Sometimes, special offers and discounts cannot gain market share and popularization regardless of costs could never turn around a hotel.

　　(2) Expanding into non-standard economy hotels

　　Segmentation in the hotel industry will be an important trend in the future. The whole hotel market segments are just like a pyramid. Different hotels at different segments have their own targeted consumers with different consumption levels and the investment and management are also differentiated. Segmented hotel market can better satisfy the needs of customers.

　　As the standard economy hotel market become more and more saturated, the occupancy rate and average daily rate (ADR) have declined, more and more owners have turned their attention to non-standard economy hotel chains, such as boutique express brand City Comfort Inn and super budget brand Hi Inn. Owing to the flexibility in facility, non-standard economy hotel chains are enormously appealing to investors and franchisees.

　　Besides, expanding into non-standard economy hotels is an important strategy for some hotel groups to grab the market share. “There are tens of thousands of individual small and midscale hotels in China, some of which are three-star or four-star hotels and some are small hostels, “said Zhao Huanyan, senior economist, HotelSolution. “These hotels have great investment potential and hotel groups need to build different non-standard hotel brands to absorb these individual hotels.”

　　So far China Lodging Group and Jin Jiang International have developed their own non-standard hotel brands. It is expected that the number of Hi Inns under the flagship of China Lodging Group will reach 1000 in 2018, but it should be noted that there are still some risks to expand non-standard economy hotels, as the rapid increase of franchisees will pose potential managerial risks.

　　(3) Uprising of midscale hotels

　　Figures from CTHA show that four-star and five-star hotels had poor performance in 2013. That is, large portions of high-end clients have flowed into other hotel market segments, because high cost-effective midscale hotels have become their ideal choice.

　　International hotel groups and domestic economic hotel chains have nosed out the opportunity in the midscale hotel segments. They have taken a series of measures to adjust their development strategies in China in 2013. International hotel groups have not only focused on the expansion of upscale hotels in China, but also put great emphasis on the development of midscale hotels.

　　For example, Marriott International has widely expanded the presence of Courtyard by Marriott in 2013. The first Hilton Garden Inn has opened in China in the beginning of 2014. Hyatt Hotels Corporation has planned to introduce its two brands Hyatt Place and Hyatt House into China. Several leading economy hotel chains in China have launched their midscale hotel brands, such as China Lodging Group, Home Inns and Jin Jiang International. China Lodging Group said the company will aggressively expand the market share of its Starway Hotels in the future. Jin Jiang International will rapidly develop its brand Jinjiang MetroPolo.

　　In addition, Vienna Hotels, Shanshui Trends Hotels and FX Hotels in the midscale hotel market have reported good performance in 2013. Although the midscale hotel segment in China is comprised of traditional individual hotels and cannot meet the market demands, which lag behind in hotel management, product services and distribution, this segment will get better in the competition under the stimulus of economic policies and market conditions. In the future three to five years, the growth of this segment will surpass other hotel segments.