(Yicai Global) Feb. 7 -- Li Chuntian has just secured CNY100 million (USD16 million) in series A investment and credit lines worth hundreds of millions for Xbed, the unmanned hotel brand the Chinese entrepreneur set up two years ago, as the staffless business model takes root in the world's most populous nation.
Gui'an New Area Digital Economy Industry Fund led the financing round, Li said in an interview with Yicai Global yesterday. The money will fund Xbed's expansion. The brand will grow its guest room portfolio and raise more funds carry when appropriate, he added.
The unmanned hotel concept follows closely in the footsteps of convenience stores and other retail outlets that are being set up to run without employees. As figures suggest China's labor costs are rising fast, businesses are embracing the staffless model to slash overheads. But insiders point out that it is not all plain sailing. Unmanned hotels face licensing issues and other challenges such as how to comply with regulations obliging hoteliers to register guests with local police.
"Our unmanned hotel model cuts 70 percent off labor costs, which saves about 50 percent of overall operating costs," said Li, who is also Xbed's chief executive.
Without staff at the front desk, guests can order, pay, check-in and check-out by themselves via an internet-based platform and smart system, Li said. A pioneer in hotel chain operation, Li also founded the 7 Days Inn budget brand in 2005.
With average daily earnings per room of about CNY270, Xbed has started turning a profit. At the end of last year, it reaped monthly income in excess of CNY20 million, Li added.
Xbed is not a hotel chain. Li and his team developed a business model resembling decentralized apartments or homestays. Xbed has more than 20,000 guest rooms, almost 1 million registered members and operates in 44 cities, according to Li. It enjoys a more than 80 percent occupancy rate, guests stay an average of three days and spend an average of CNY350 (USD56).