CASE STUDY

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Atour: Continuously Building ”Chinese Experience” — Setting a New Benchmark in the High-end Hotel Industry

Jun 17, 2024
Atour: Continuously Building ”Chinese Experience” — Setting a New Benchmark in the High-end Hotel Industry

Introduction

In today’s rapidly changing consumer market, shaping an exceptional customer experience has become a new path for enterprises to achieve stable and sustainable growth. By clarifying brand positioning and values, formulating comprehensive experience strategies, and creating unique and memorable experiences at critical moments, enterprises can deeply connect with customers, build solid relationships, and achieve continuous growth. As a company specializing in experience consulting, we deeply understand the importance of experience empowerment. With unique thinking and methodological models, we will analyze typical representatives of successful enterprises in the market and explore how they achieve business breakthroughs and success through customer experience strategies. We look forward to providing inspiration and reference for more enterprises by sharing our research results, and jointly opening a new era of experience-empowered business.

 


Case Study—Atour Hotel

 

Shanghai Atour is China’s largest mid-to-high-end chain hotel, with 119 hotels in first-tier cities and 367 hotels in new first-tier and second-tier cities, totaling 71,121 guest rooms across 131 cities in China. Atour is committed to providing unique guest experiences and diversified lifestyles, ranking first in China’s mid-to-high-end chain hotel rankings for four consecutive years.

 

This case study aims to explore how the Atour brand establishes its competitive advantage in the industry through high-end services and experience design, analyzing the brand’s differentiation strategies, high-end positioning, and experience strategy framework.

 


Industry Overview

China’s hotel industry is fragmented with a low chain rate, which has been increasing year by year.

 

According to statistics from Yingdie and Euromonitor, based on the scale of 3.38 million guest rooms in China’s chain hotels and a total of 9.28 million guest rooms in China’s hotel industry in 2019, the chain rate was approximately 36.4%. Since 2018, the number of guest rooms in independent hotels has decreased year by year, while that in chain hotels has steadily increased.

 

 

The upgrading of consumption levels driven by the continuous structural improvement in population income has led to a trend of diversification and segmentation in consumer demand. The demand for the development of ultra-high-end and luxury new hotels, which is driven by real estate investment, has shown a slowdown trend. Owners and investors have become more rational in their investments, pursuing marketization, professionalization, and long-termism. This has created a development opportunity for the growth of high-end selected service hotels and mid-to-high-end limited service hotels.

 


Differentiation Strategies of the Atour Brand
1. Largest Domestic Scale, a Lifestyle Brand
Atour Group is China’s largest mid-to-high-end hotel group, featuring unique accommodation experiences. Inspired by Atour Village in the border area of Yunnan, founder Wang Haijun advocated the humanistic, warm, and interesting lifestyle concept of "the fourth space on the road" when establishing the Atour Hotel brand. With hotels as a link, Atour Group is committed to integrating the three spaces of family, work, and social interaction, providing quality hotel services and lifestyle products for new middle-class consumers.

 

Atour Group’s first directly-operated hotel opened in Xi’an South Gate on July 31, 2013, and by 2017, it had expanded to 100 hotels. According to Frost & Sullivan data, from 2017 to 2022, Atour Hotels ranked first in terms of scale (by number of rooms) among domestic mid-to-high-end chain hotels for six consecutive years. On November 11, 2022, it successfully listed on the NASDAQ in New York, becoming the first stock in China’s new accommodation economy sector and starting its journey of optimizing "Chinese experiences".

 

As of the second quarter of 2023, Atour Group operated 1,034 hotels (33 directly-operated and 1,001 franchised), with a total of 120,400 guest rooms. In 2023, Atour Group achieved revenue of 4.666 billion yuan, a year-on-year increase of 106.2%; net profit reached 739 million yuan, a year-on-year increase of 669.2%; and adjusted net profit was 903 million yuan, a year-on-year increase of 248.3%. These figures mark Atour Group’s continuous development and achievements in the industry.

 

 

2. Positioning Focused on the Mid-to-High-End Market

More than a decade ago, before Atour was founded, with the rapid development of domestic real estate, the hotel industry showed a distinct polarization: economy hotels and high-end hotels grew rapidly, while mid-range hotels were still in their infancy.

 

Therefore, when the Atour brand was established in 2013, it immediately focused on the mid-to-high-end business travel market. By combining the efficiency of economy hotels with the experience advantages of high-end hotels, it efficiently entered the market and rooted itself in experience, making experience the core of its business operations. It took "de-expressification" as the key to building brand perception, avoiding the formation of认知 such as "express hotel" or "low-cost" in consumers’ minds. As a start-up, Atour achieved a breakthrough through the design of standardized high-quality service experiences when the experience economy was just emerging.


3. Cultural Positioning Strategy: "Inspired by a Trip to Bhutan"

 

 

The name "Atour" originates from Yaduo Village in Nujiang, Yunnan, which founder Wang Haijun accidentally visited during a trip. The beautiful and fresh natural scenery, along with the kind and simple folk customs, deeply touched this entrepreneur with a pure heart. The original intention and development philosophy of "Atour" Hotels are inherently linked to humanistic feelings: the group adheres to the product philosophy of "humanistic, warm, and interesting," and is committed to building a lifestyle brand integrating "new accommodation, new culture, and new consumption." It stays close to and explores the industry market, insightfully understands and leads customer needs, and carefully builds an urban "utopia."

 

The founder of Atour Hotels has pioneered a new field in the community economy business model, breaking the traditional hotel industry’s ideological shackles of "managing spaces" and returning to the service mindset of "managing customer groups." The company balances the mission of enhancing the hotel’s cultural core with commercial operation goals. By endowing themed hotels and diversified activities with different cultural connotations, it improves the brand’s community influence and appeal.


4. Brand Business Strategy: Full Coverage of Mid-to-High-End Chains
With Atour, the representative mid-to-high-end brand, as the core of its hotel network, the company first launched the Atour S brand in 2016, positioning it as an upscale hotel serving high-end business and leisure travelers. In the same year, the company launched Atour Light, a mid-range hotel brand mainly catering to young urban travelers. By transforming existing boutique hotel properties in the market into Atour Hotels, the company launched Atour X in September 2020 to further expand the mid-to-high-end hotel market. During the same period, the company created a new upscale hotel brand, ZHOTEL, to cater to the rising generation Z travelers. The overall business covers the entire mid-to-high-end chain, meeting various consumer needs.

 

 

The high-end positioning of Atour is mainly reflected in the following aspects:

1. Lifestyle-oriented brand portfolio covering mid-to-high-end to luxury segments: Its brand matrix includes AT HOUSE (luxury segment), Atour S and ZHotel (high-end lines), as well as flagship Atour hotels and Atour Light stores (mid-to-high-end segment). All positioned brands fall into the mid-to-high-end category and above.

2. High-end product strength with quality assurance: Solid performance in four core product dimensions: public spaces, hardware facilities, personal bedding, and hygiene & safety.

3. Premium business philosophy: "Room + X" model**: Atour creates novel and engaging hotel consumption experiences through cross-border IP collaborations with Hupu, NetEase Cloud Music, NetEase Yanxuan, etc., continuously enhancing user stickiness. As of the end of March 2021, Atour operated 14 IP-themed hotels focusing on music, basketball, literature, etc. Their Average Daily Rate (ADR) reached 469.1 yuan, 15.4% higher than that of peer hotels in the same category.

4. High-quality personalized services: Atour categorizes over 40 service products into three tiers: basic services, personalized services, and customized services. Users are segmented by membership levels, with each level corresponding to specific service tiers. It delivers the highest customer satisfaction among hotels with the same positioning by identifying key touchpoints throughout the user journey and offering high-quality personalized services beyond standard procedures to enhance the overall experience.

5. Innovative scenario-based sales strategy: Atour is China’s first chain hotel to develop scenario-based retail business, providing customers with personalized and immersive shopping experiences. By embedding numerous shopping scenarios and customer entry points in hotel rooms and public areas, it collects data on customer preferences, helping the enterprise identify market trends and drive related consumption.


Customer Experience as the Key to Growth
Beyond the above differentiation strategies and positioning, high-quality customer experience is also a crucial factor for Atour’s market recognition.


Brand Commitment:
——Clarifying brand commitment and reshaping consumption perception

Atour Hotel’s brand commitment: To create warm connections between people

The brand’s vision of "quality" and "leading lifestyle," along with its mission of "creating warm connections between people," establish the core direction and tone for the brand. Based on these visions and missions, the company formulates brand experience strategies and service methodologies through in-depth insight into user needs and forward-looking design.

Guided by this unified strategy and service methodology, the company strives to ensure that users consistently perceive the brand throughout their entire journey—from awareness, interest, and experience to repurchase and advocacy. This means that at every stage of the brand experience, users can feel the uniqueness brought by quality and leading lifestyles, and build deeper emotional connections during interactions with the brand. Through carefully designed experience strategies and service methodologies, the company aims to create lasting and satisfying brand impressions, driving users to establish brand loyalty on multiple levels.


Experience Value Proposition:
——Defining the experience value proposition and translating it into clear experience strategies and principles to fulfill the brand’s commitment to consumers.

Atour Hotel’s brand value proposition: A humanistic, warm, and interesting lifestyle

Through years of development, Atour has become a leading lifestyle hotel brand in China. It adheres to the principle of user experience first, dedicated to providing users with "Atour-level" services as warm as those from neighbors, achieving温情 connections with users. Starting from accommodation, it conveys a humanistic, warm, and interesting lifestyle to consumers pursuing quality life, and shapes and improves people’s future lives through continuously improved high-quality products, services, and experiences.


Atour Hotel’s Experience Values (Experience Principles):

- User First: Sustained focus on and optimization of customer experience. By always prioritizing customer needs, Atour ensures every guest feels its care and professionalism through personalized services, innovative hotel experiences, and rapid responses to customer feedback.

- Uphold Integrity and Follow the Right Path: Emphasizes maintaining an honest and upright mindset. In Atour’s services, this means employees treat every guest with sincerity, requiring them to treat all guests equally at work and ensuring everyone receives fair treatment and respect.

- Break Boundaries and Collaborate as a Team: Atour defines its frontline operations as "front desk," and all other departments as "back office," which exists to serve the front desk. In KPI evaluation, the back office is scored by the front desk. Unlike most hotels where general managers evaluate employees, Atour allows employees to rate the general manager through anonymous voting—scores below a certain threshold trigger public listing and rectification. The goal is to build harmonious grassroots relationships, break departmental and hierarchical boundaries, and promote teamwork, with all efforts focused on the core goal of delivering excellent experiences.

- Deliver Results with Closed-Loop Management: A management philosophy emphasizing result orientation and process completeness. It stresses the pursuit of clear, measurable outcomes in all work or projects, and ensures continuous improvement through closed-loop management.

- Reject Mediocrity: Reflected in its unremitting pursuit of service quality, continuous optimization of customer experience, and constant enhancement of brand value. Through innovative service models, unique cultural experiences, and high-standard operational processes, Atour ensures every guest enjoys services that exceed expectations.


 Analyzing Atour Hotel’s Experience Value Framework Using the Pyramid Model

 

Customer Journey, Critical Moments, and Touchpoints:

——The core of shaping an experience journey lies in starting from customer needs, creating Moments of Truth (MOT), and leaving unforgettable memories for customers.

 

 

Atour Hotel identifies twelve touchpoints throughout the entire process from a guest’s first check-in to their subsequent stays, which are the twelve key nodes of Atour’s services. These twelve important nodes are integrated into a customer’s stay journey as illustrated in the diagram.

 

Through meticulous services and the creation of surprising moments throughout the entire journey, users are left with a profound and memorable experience.


Consistent Touchpoints Aligned with Experience Principles
The shaping of a customer journey cannot be separated from the careful design of touchpoints. Only a consistent experience allows customers to perceive the brand’s tone and value to the greatest extent.

Unlike most service industries that strictly follow SOPs (Standard Operating Procedures) for service processes, Atour no longer relies on SOPs to manage employees. Instead, it "products" services like internet companies do. By researching all touchpoints in the user’s entire journey and based on its own brand values and tone, Atour conducts in-depth thinking and design on the service tools required for each touchpoint, ultimately developing over 40 service products. These service products are developed to address the needs of different customer groups, such as "wine-sobering tea," "personalized hand-painting," and "mind-body vitality" services.

 

These service products (touchpoints) are categorized into three tiers. Beyond standard service procedures, high-quality personalized services are provided based on user needs, and even customized services are offered to core high-loyalty users. This approach maximizes resource utilization and overall improves customer satisfaction and stickiness.

1. Basic Services: Services available to every guest staying at Atour.
2.Personalized Services: Personalized products provided based on customers’ points tiers (e.g., regular users, gold card members, platinum card members, etc.).
3. Customized Services: Services and service tools tailored to customers’ specific needs (requiring payment or points redemption).

 

 

Internal Actions to Reshape the Journey:
——Unify goals, map full views, formulate action paths, and drive full participation with rapid iteration.

In the past, hotels relied on SOPs (Standard Operating Procedures) for management, with each hotel having a thick manual to guide operations and management. However, Atour has achieved high-quality service delivery from its employees and service systems in its own way, mainly reflected in the following two aspects:

1. Standardization: By conducting in-depth analysis of every touchpoint in the customer journey, Atour Hotel has implemented a refined standardized service process. This process is built on 17 key customer touchpoints, covering the entire experience cycle from booking, check-in, stay to checkout. For these touchpoints, Atour has carefully designed and developed over 40 service products. Employees provide services to customers throughout the journey based on these products, ensuring standardization and that every guest enjoys consistent high-quality service during each stay.

2. Personalization: In terms of products, Atour customizes exclusive service offerings for users. For example, in the early days, when platinum members checked in, they would receive custom slippers embroidered with their surname initials from the front desk, allowing customers to feel the thoughtfulness of the hotel’s customized service. Another example is Atour’s handwritten welcome cards—guests are often touched by the sincerity behind this personalized gesture. In terms of service delivery, Atour has a unique system: **full staff authorization**. Every employee is granted a quota of 500 yuan (or the right to cover one day’s room rate) to address reasonable needs raised by users when they provide feedback. This system activates employees’ individual strengths, enabling them to maintain flexibility in response to changing situations while delivering standardized services. It allows rapid responses based on user circumstances, timely problem-solving, and ultimately enhances user satisfaction.

 

In addition to strategic actions and systems, ideological building is also crucial in driving experience improvement. It endows the enterprise with guiding principles and directs the evolution of experiences. Driven by the "user first" corporate culture, Atour has fostered unique cultural practices such as "full staff feedback" and "full staff authorization." These initiatives continuously enhance employees’ initiative in providing feedback and delivering services, uniting the team in their efforts to shape a better customer experience.

 

 

Continuous Monitoring and Optimization:
——Effective management ensures the sustainability of customer experience through experience monitoring and continuous improvement.

User Feedback Collection: Atour Hotel collects user feedback through various technologies and methods. For example, Atour has its own tools such as A Plus and "APP Snap" (a feature for instant feedback via the app), and identifies shortcomings or areas for improvement in services through closed-loop behavior feedback and supervision mechanisms.


Service Iteration and Updates: Atour Hotel iterates and updates its services based on the collected user feedback. Atour operates a unique daily program called "Experience Supervision," which runs year-round without interruption. Hotel general managers receive daily reports of positive and negative reviews. For negative feedback, general managers are required to analyze the causes and propose rectification measures. Additionally, Atour openly discusses negative reviews in a general managers’ group to drive continuous service improvement and product iteration. The hotel adheres to the principle that "no negative feedback is left unresolved overnight"—any guest issues or complaints are addressed on the same day, typically within 2–3 hours of occurrence. As a result, this rapid feedback-and-iteration mechanism has, to a certain extent, ensured continuous service improvement and increased customer satisfaction.


The shaping of experience is systematic and multi-dimensional, and has become a new path for enterprise growth.

 

Founded in 2012, Atour has developed rapidly through its unique business model and outstanding customer experience design. Financial reports show that in 2023, Atour Group opened 289 new hotels and signed 576 new hotel agreements, exceeding its annual targets set at the beginning of the year. By the end of 2023, the number of operating hotels under Atour Group reached 1,210. Despite external challenges in recent years, Atour has still managed to recover ahead of the industry and sustain its brand premium capability.

 

In this fiercely competitive business world, alongside business models and market strategies, customer experience has become a key to brand success. From brand positioning and strategy formulation to innovation, implementation, and comprehensive experience management, the process of shaping experience—by clarifying brand positioning and values, developing experience strategies, identifying critical moments, creating peak experiences, establishing management and monitoring systems, and optimizing customer experience to improve conversion rates, repurchase rates, and recommendation rates—has become a new path to achieving stable and sustainable growth.

 


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