The LaQuinta Hotel Group of the US would invest in high-grade star hotels in Shanghai and entrusted the hotels to the hotel management company jointly established by the Ansheng Group Co., Ltd. of Shanghai and the LaQuinta Hotel Group of the US. The LaQuinta Hotel Group, one of the largest select service hotel groups（at about 4-star level）in the US, has 600 hotels in 39 US states. 60% of the hotels are self-operated and 40% are specially permitted businesses. its net book value exceeded 2 billion US dollars. The company boasts two famous brands: LaQuinta (established in 1968) and Baymont（established in 1974 and gained the brand name in Sep.The Ansheng Group Co., Ltd. of Shanghai, established in 1995, a member work-unit of Shanghai Commercial and Industrial Association, is a private group company combining investment（finance, industry, high technology), real estate development, property management, material transportation, cultural and recreational service and so on. The company, with investment as its precursor and real estate development as its base, has successfully developed the “Ansheng Garden”, the “Ansheng Flower Garden” and the “Ansheng Landscape Garden”. It has forged the “Ansheng” brand and has completed and delivered for use medium and high-grade housing with a total area of over 300,000 square meters. The company also won the title of Advanced Private Enterprise of Shanghai during the 1997-2004 period and the title of Top 100 Private Enterprise of Shanghai during the 2001-2004 period.
According to the statistics of Shanghai Tourism Administrative Committee, Shanghai’s demand for high-grade 4 or 5-star hotels is 8 million room-night-times in 2005. In 2006, the star-grade hotels being built in Shanghai add up to over 280, about 40 or 50 of which are 4 or 5-star hotels, with most of them located in the suburbs. According to a prudent prediction, the demand of Shanghai’s high-grade star hotel market will be 10 million room-night-times in 2010, and the market investment space will meet the demand of 2 million room-night-times, with an occupancy rate of 65%. Considering the overall influence of economic, social and industrial elements and so on, the demand of Shanghai’s high-grade star hotel market in 2010 will be nearly 11 million room-night-times, and the market investment space will meet the demand of 3 million room-night-times, with a permanent occupancy rate of 70%.
Regardless of land cost, a 5-star hotel with 500 guest rooms needs an investment of about 457.5 million RMB, and a 4-star hotel with 400 guest rooms needs an investment of 274.5 million RMB. Among the hotel income, income from guest rooms takes the first place and income from food and beverage comes next. Among the cost composition, depreciation and taxation take the first place and income from food and beverage comes next. Therefore, guest rooms produce the largest part of the hotel profit. Calculated in terms of optimistic estimation, neutral estimation and conservative estimation, during the 2008-2028 period, the gross profit rates of 5-star and 4-star hotels are respectively as follows.
The trend of internationalization is becoming increasingly clear in the hotel management field, so the LaQuinta-Ansheng cooperation is a cooperation between strong enterprises.The key to profit by the LaQuinta-Ansheng Hotel is to control the investment cost and the planning and construction period before the operation period and, in the operation period, strengthen marketing and human resources management, raise the utilization rate of floor space.Ansheng should stress its negotiations under contract with LaQuinta, striving for more rights and interests in key terms such as contract period, contract termination, system of report, compensation and stock right transfer. In hotel marketing, the hotel should choose proper market competition strategies, make proper marketing plans and carries out proper marketing strategies.The human resources management department of the hotel should show true concern for the employees, choose the best employees and offer them training and encouragement.The financial management department of the hotel should make scientific budget plans and strictly carry out cost control and unabridged financial evaluations.