In ancient China, people called the way to the western regions “The Silk Road”. And the place where people to have a rest on this way named “posthouse”. By the 21st century, China's economy has developed rapidly, a large number of business hotels emerge at this historic moment. FX Hotels Group (F-富驿（2724）) is proud to lay claim as the first stylish business hotel-chain in China with its operation philosophy “smart stylish @ comfort”. Since its founding in 2002, FX Hotels Group (“FX”) is continued to expand its business hotels & resorts in Asia. We appreciate that Mr. Houzunzhong, president of FX Hotels Group, took time out from his busy schedule to share his management philosophy, FX brand value and his spiritual journey over the 20 years, with us.
Brand & Positioning
From the early primary cities such as: Beijing and Shanghai to the secondary cities, China's economy has developed rapidly, since its market reforms began in 1980. While, FX Hotels Group must have some special advantages to make it become the top mid-range business hotel brand in the vibrant China. “Brand positioning, is our core advantage. Only have a clear direction, we can march forward courageously”, Mr. Hou answered. FX Hotels Group currently operates under 3 distinct brands – FX, Boutix and Artix. Among them, FX is Group’s flagship brand, which emphasize “low-level expense; high-level enjoyments”. Since the consumptive ability of consumers has risen, they have become increasingly more discriminating in regard to quality. Boutix is the boutique hotel aimed to fulfill their requirements. And Artix is 5-star tourist hotel launched by FX Hotels Group for the tourism between mainland and Taiwan is booming. “Compare with many other hotel charged RMB 1000 – RMB 2000 per night, our room rate of RMB 500 – RMB 600 is much cheaper, though we are advertised as 5-star hotel. And guests can still enjoy the high-level service in our hotel.” emphasized by Mr. Hou.
Walk into the FX hotel in Zhongshan district, what jumped into your view is the hotel’s fashionable decoration. And it is another advantage of FX Hotels Group. Mr. Hou said, “All of our FX hotels put the stylish element into the designing. And it makes us different from the local hotel brands.” To attain this aim, FX Hotels Group invested heavily to invite David Rockwell, designer of W Hotel in New York, to design for them. And the novel design successfully attracting the lodging of young people. “Our hotels can attract people between 25 years old and 40 years old in particular.” Mr. Hou said.
Different from FX, Artix aimed at tourism market. Nowadays, the tourism between mainland and Taiwan is booming, FX Hotels Group will launch its first Artix hotel in Yeliu in the first season, next year. “Other than the man-made scenic spots: Jiufen, Danshui and Daxi, Yeliu is the natural landscape – a must-see in Taiwan. While, since Yeliu is lack of hotels, tourists have to live in Shenkeng or other regions which is very inconvenient for them. So we seek to reinvent the tourists’ hotel experience through our stylish, comfort hotels with reasonable room rates in this region.” Mr. Hou said. In addition, FX hotel is going to open in Gaoxiong, next year. Moreover, FX Hotels Group is actively assessing possible acquisition targets in Sun-Moon Lake.
Rapid Expansion with Clear Strategy
When mention the group development plan, Mr. Hou said “We've made our plans. Develop franchise hotel is still our main target, next year. And we tend to develop our hotel in secondary and tertiary cities. What’s more, do business in the mainland, we need to focus on its policy. Compare with the primary cities, there is more privileges and assistances in the secondary and tertiary cities.”
Now, there are two ways to join in FX Hotels Group: upgrade your old hotel or convert the commercial building, and the latter is preferred. “Our franchise evaluation is very prudent. For us the payback on our investment should be less than five years. We want to build a win-win relationship with our partner. So they will be able to afford 4%---5% revenue per year.” Mr. Hou said.
FX Hotels Group has built a membership system. And the FX members are expected to 3,000,000 at the end of this year. Mr. Hou said, “Statistics indicated that the customer number of our franchise hotels has increased about 20%. And this is our brand value.” When the hotel is not doing too well, FX Hotels Group will send their specialists from the headoffice to help the hotel to change the situation. “We are proud that no franchise hotel rescinds the contract with our group, at present. This year, from January to September, our Occ. Rate is up to 76---80%” Mr. Hou said.
But when Mr. Hou was asked whether he is satisfied with the operations, he said,” I never satisfied. Or we will out of motivation.” With the aim of opening 300 hotels in 3 years, Mr. Hou thought the expansion speed of this year was a little slow. Over the past half year, FX Hotels Group devoted itself to employee training and poached specialists from other company. Also, the franchise department has been newly formed. So, they believe that there will be 90 – 100 hotels under its group at the end of this year. And the number will become 140 – 150 next year. The ratio between directly-managed hotels and franchise hotels will be 3:7. And FX is undergoing a total upgrade. Which means the hotels will become more fashionable, and coffee bars will be newly built there. All of those changes will help Lifting our FX Hotels Group above other brands.
Some Opinions about the Cross-Strait Tourism
Mr. Hou points out that people from the mainland are not satisfied with the tourism service in Taiwan. The tight schedule made them cannot enjoy anything. So the number of returning visitors is very small. Though some people thought there are 1,300,000,000 people in the mainland, each people come to Taiwan once is enough. Mr. Hou still insists that, tourism is the long–term business of Taiwan. Government should pay more attention to it. Compare with HK and Singapore, there are more famous attractions in Taiwan, including Sun-Moon Lake, YeLiu, Ali Mountain etc. And the government can also imitate HK to set plentiful duty-free shops. Or take Singapore as an example to set gambling house on its offshore islands. He believed that the tourism of Taiwan is not less popular than HK and Singapore.