Playing to win: Are e-sports the gamechanger hotels need?

As China’s hotels suffer and expire in the post-pandemic period, gaming hotels combining accommodation and superior technology may show the way forward.

Photo from Yunik Hotel

Photo from Yunik Hotel

By ZHENG Cuiying


Although there are more than 370 e-sports hotels in Zhengzhou, the capital city of central Henan Province, it is still difficult to find a room at the weekend. YUAN Yang has seven e-sports hotels in the city.

There could be as many as 15,000 e-sports hotels in China by the end of this year. Yuan's place is pretty standard: comfortable gaming chairs, 24-hour room service, late checkouts, slick IT, and minibars stuffed with drinks, ice cream, and a range of snacks. Yuan’s customers seldom leave their rooms, and they prefer ordering takeout.

Yuan is the founder of I-Hotel, a chain of more than forty gaming hotels. He might insist on calling his establishment a hotel, but there are very few travelers. Local customers occupy about 80 percent of the rooms. Health considerations due to the pandemic have made travel a lot less appealing to many. Gamers never even go outdoors except perhaps to slump in the hot tub. 

Logical accommodation

For a long time in China, internet cafes have been centers of gaming and socializing among teenagers and above. The gaming hotel is a logical extension of a situation that already existed.  

Gaming is a very bright star on an otherwise dark horizon for hoteliers. The hotel industry in Beijing lost 1.7 billion yuan (US$260 million) in the first half, while profits in 2018 were 1.8 billion yuan. Hotels must find new value to add and frantically juggling novelties – gaming, movies, escape rooms. Many of these – like gaming– activities are performed in hotel rooms, rather than reasons for staying in a hotel in the conventional sense.

"Everybody is trying to break the deadlock," said XU Haochun, CEO of Hanting Hotels. "E-sports is a good idea since the demand out there is huge."

In August 2020, Youxi Movie Hotel received 175-million-yuan financing from AlphaX and Duocaitou. In June, Tongcheng-Elong invested tens of millions of yuan in I Hotel, the only public financing for a new hotel this year.

Leveling up

In 2018, competition in the hotel industry was already oppressive. In east and south China, where the occupancy was high, the average payback period of mid-end hotels was between four and five years.

According to Yuan, most of I Hotel’s customers are young, under 28 years old, and 90 percent of them are regular customers. The business model is much closer to that of a KTV or VIP tables in a nightclub than temporary accommodation for those away from home. “Occupancy” exceeds 90 percent in some chains. 

JIA Chao, chairman of Youxi Movie Hotel believes business hotels have an oversupply problem: "Pan-cultural theme hotels and special hotels are only seven percent of the industry. That may increase to 50 percent."

Besides e-sports and movies, other activities have appeared. Yunik Hotel organizes board games, handicraft, and skincare courses. Yunik’s SHI Jin told Jiemian News that the cost of fitting out a room is about 100,000 yuan, while the rate is generally under 500 per night. "Our current occupancy rate is above 85 percent. Extras including F&B account for up to 15 percent of revenue," said Shi.

Manju Hotel has tried a “Hotel + Teahouse” model to attract tea fans. So-called “family activities” are also popular. In 2018, family trips exceeded 100 billion yuan and were growing at 60 percent. The most popular hotels are not cheap, but expensive and distinctive.  

Perchance to dream

The “Hotel+X” model has limits.

“The theme must have some popularity and a target audience. Movies and e-sports are ideal," said Jia. "They are never short of new content."

Some crossover hotels work very hard on the content. Youxi offers movie costumes and videos. I Hotel plans to e-sports events.

But good content isn't easy to come by, some hotels tried to "borrow" ideas from others but only ended up in lawsuits that they can't settle without million or even billion yuan.

Xu said for the "Hotel+X," there must be a “hotel.” New forms are just a supplement, and the core business remains unchanged – people go to hotels to sleep when they are away from home.