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If high-end hotels are unoccupied for a long time, will they face the risk of loss like express hotels?
Many people think that high-end hotels are more luxurious in infrastructure and more expensive in house prices than express hotels. If high-end hotels are unoccupied for a long time, will they face the risk of loss like express hotels? Not really. A Shangri-La hotel executive once told me that although the room occupancy rate is an important source of income for high-end hotels, its influence is not absolute.

Will not lose money for high-end hotels, the occupancy rate can reach 50%, and after the occupancy rate reaches 75%, the whole hotel will be in a state of high load, so it is necessary to control the room occupancy rate in time to avoid affecting the operation of the whole hotel.

Generally speaking, the room occupancy rate of a high-end hotel can only be maintained at 20% per year. You can keep the hotel in balance. The rest of the profit model depends on other projects of the hotel, and the supporting services of high-end hotels are the focus of attracting guests' consumption.

From the definition of high-end hotel, we can know that the cost of investing in building a high-end hotel is very high, but under the premise of high investment, there are not many guests who usually stay, so how can the hotel make a profit? In addition to the room rate brought by guests' check-in, other ways of making profits mainly come from the following five points.

1. Supporting projects of the hotel Besides guest rooms, high-end hotels also provide other services. Generally speaking, hotels on floors 1 to 5 do not provide accommodation. There will be large conference rooms and restaurants, such as Chinese food, western food, buffet, bar, pub, swimming pool and advanced gym. Mainly depends on the hotel's marketing team. If the hotel catering industry is well done and attractive enough, it can bring great profits to the hotel.

Second, the wedding banquet, the annual meeting of enterprises. However, in addition to providing accommodation, all major hotels will also host wedding banquets and annual meetings of large enterprises, including some important meetings of the unit. Mainly depends on whether the hotel will promote and attract people. Many high-end hotels basically receive many couples' weddings at the same time every day during the wedding season.

Besides, in daily life, many enterprises will hold important meetings or annual meetings in high-end hotels in order to enhance the sense of ceremony. Moreover, according to my observation, in our local area, many insurance companies and real estate agents cooperate with hotels and even sign long-term cooperation agreements every time they hold large-scale meetings because of too many employees.

Third, rent subsidy is a kind of project support. Many five-star hotels in first-tier cities are on the top floor of high-end office buildings, especially in Guangzhou Pearl River New Town business circle. Many high-end office buildings will sign cooperation agreements with some high-end hotels in order to upgrade their own grades and attract more enterprises to settle in. Part of the hotel's income can be subsidized by office rent.

Fourth, the location of high-end hotels seeking capital premium is very strict. Generally, they will choose the prosperous areas in the city or the areas with extremely high value-added in the future. There is also a saying, "Where a five-star hotel is built, it means that the land price in that place will rise soon." Many high-end hotels with low-cost investment can be resold to local enterprises or units in need after the land price rises.

Hotels can get loans as collateral, which is also ignored by many people. As a relatively high-quality asset, high-end hotels can be used as loan collateral, and many hotels can use this to obtain loans with relatively low interest rates. In this way, the loan amount will be used for other investment directions to obtain income.

Besides making profits, what other functions do high-end hotels have? In fact, many investors have other functions besides making profits when building high-end hotels. For example, when many real estate enterprises invest in tourist cities or high-value commercial land, in order to improve the overall grade and attract guests. Will choose to build high-end hotels.

Other non-real estate enterprises will also choose to invest in high-end hotels as their own image display, which not only expands the company's business, but also meets the reception needs of enterprises in their daily operations, killing two birds with one stone.