IDGVC founding partner Xiong Xiaoge once said to Hanshin Hotel CEO Ji Qi at the last month's Bang Annual Conference on Entrepreneurship, "If you take the Hanshin Hotel public and turn it into a company worth over 1 billion US dollars, then you will have created a record of being able to make three listed companies in a row all worth over 1 billion US dollars worldwide." Two out of the three companies that Xiong Xiaoge referred to belong to the economy hotel category. This type of business was an unfamiliar term to Chinese people more than ten years ago. Economy hotels eliminate fancy facilities with low usage rate but high cost such as luxurious hotel swimming pools and fine dining restaurants. They only provide clean and tidy guestrooms and achieve scale operation through standardized chain mode. The core lies in high cost performance, not the literal meaning of "cheap". Planting this concept in the minds of Chinese people is not coincidental. With the opening and continuous growth of domestic and international tourism markets as well as business travels, economy hotels have found their survival space between star-rated hotels and traditional guesthouses, carving out the third road in hotel management. This imported product borrowed from foreign motels has been improved on Chinese soil, combined with innovations in product design, management model, and capital operations, sharing the wallets of business people and leisure tourists while also becoming a representative product of China's new service economy. Currently, the trend of differentiated competition among economy hotels has already begun to emerge. For instance, Home Inn moves "up" with its "He Yi" brand to try mid-to-high-end market, while Hanshin's "Hai You Hostel" and Jin Jiang's "Bestime Express" move "down" to explore the blue ocean. Regardless of how the situation develops, products, services, and brands are always the three shields erected before the enterprise defense line, becoming effective "defensive equipment" for mutual combat. Data shows that by the end of 2008, there were 2,805 economy hotels in China, while in 2007, the number of economy hotels in the U.S. had already reached 60,000, indicating that there is still huge development space for economy hotels in China. More competitors have entered the arena, and the key lies in not being blindly aggressive but finding one's own "track". Comment: A president of an economy hotel says that the lower down the pyramid, the denser the population covered. The positioning of economy hotels captures the lower-end consumption, catering to the actual needs of large groups in the consumer market. However, currently, costs in property and manpower for economy hotels have been raised to quite a high level, compressing their profit margin very low. The key to winning in the competition lies in scale and differentiation. Related thematic articles: A purchasing manager's monthly work summary - buying guide, industry knowledge, Zhengzhou 114 Hotel Supplies Network.