Summary of Key Points
The incident where the cleaning staff at Huazhu's Full Season Hotels forgot to close the doors may seem accidental, but it is actually an inevitable consequence of the cost-cutting measures, distorted evaluation systems, and the inherent contradiction between scale and quality under the franchise model. Huazhu relies on franchise fees for expansion, but the high franchise costs and high commissions force franchisees to cut staff, especially in cleaning. Regional managers and store managers, under the dual pressure of increasing revenue and zero accidents, tend to cover up problems rather than addressing them. Despite Huazhu's claims that "quality comes before scale," the company continues to open new hotels at an alarming rate, leading to frequent service issues. To solve these problems, Huazhu needs to reform its incentive structure and sacrifice short-term profits; otherwise, similar incidents will continue to occur.
1. Forgetting to Close Doors is Not Accidental: Franchisees are Forced to Cut Staff
How expensive is it to open a Full Season Hotel? Franchise costs range from 10 to 18 million yuan (including renovation, franchise fees, and security deposits), and during the 10-year franchise period, franchisees must also pay Huazhu about 13% of their monthly revenue in the form of management fees, reservation fees, and membership registration fees. However, hotel business is becoming more challenging: the average daily revenue per room (RevPAR) decreased in 2025, extending the payback period from 3 years to 5-6 years.
To make a profit, franchisees have to cut costs, with labor being the biggest area for reduction (accounting for 18%-25% of revenue). Huazhu requires a staff-to-room ratio of 0.17 (only 17 staff for 100 rooms), which is even lower than that of standalone hotels. Cleaning staff are the first to be targeted for cuts: they have to clean 12-30 rooms a day, with each room taking 30-45 minutes, but their wages (10-20 yuan per room) force them to work faster. Omitting a step in the process (such as forgetting to close a door) is just a matter of time.
In one sentence: Franchisees, unable to make a profit, force the cleaning staff to work excessively, leading to inevitable service flaws.
2. "Blaming Someone Else Doesn't Help": Evaluation Pressure Prevents Managers from Telling the Truth
The threatening statements are not due to the managers' personal shortcomings but are a result of the evaluation system. After Huazhu reorganized its brand division into regional companies, the evaluation criteria for regional managers became "increasing revenue and zero safety/cleaning incidents"—they need to generate more money without any mistakes. What happens when problems arise? They are suppressed, as a zero-incident record directly affects their evaluations, and reporting issues could harm their careers.
Store managers face an even harder position: they are sent by Huazhu to represent the brand, but their salaries are paid by the franchisees. Franchisees complain that they pay 15,000 yuan per month in manager fees to Huazhu, yet the managers' base salaries range from 4,500 to 10,000 yuan—where does the difference go? Caught between Huazhu's evaluation standards and the franchisees' interests, managers may lose control in extreme situations (such as the 2024 incident where a Hanting store manager killed a franchisee in Guiyang).
In one sentence: Conflicting evaluation criteria make managers prefer to cover up problems rather than solve them.
3. Saying "Quality Comes First" while Opening Hotels Frantically: Huazhu's Dilemma
At the 2026 performance meeting, Huazhu declared that "quality comes before scale," yet in 2025, the company opened 2,444 new hotels (almost 7 per day), setting a new record. Why? Because Huazhu's revenue increasingly relies on franchises; franchise fees accounted for over 50% of total revenue in the second quarter of 2026. The number of stores is the key driver of growth, and the engine cannot stop.
Who bears the cost? The franchisees. In the fourth quarter of 2025, for every 10 new hotels opened by Huazhu, 5 old ones had to close, with 90% of those being franchisees. What's more infuriating is that Huazhu opens new hotels in close proximity to compete with existing ones—for example, two Hanting hotels in Beijing were only 194 meters apart in 2016, sparking a rights dispute among 1,400 franchisees.
In one sentence: To make money, Huazhu must sacrifice the interests of its franchisees and service quality.
4. Learning from Others: Other Brands Have Effective Solutions
The problems associated with the hotel franchise model are not unique to Huazhu, but other brands have more effective approaches:
- Yado: After the "hospital pillowcase" incident in 2025, they established an independent inspection team that reports directly to headquarters and immediately shut down non-compliant stores, also setting up a 10-million-yuan compensation fund.
- Marriott: Conducts an annual third-party brand audit, and all hotels must meet standards; those that don't are removed from the franchise.
- Jinjiang: Although franchises account for 95% of their business, they acknowledge they cannot control franchisees completely and have made adjustments after the 2026 bedbug incident.
Huazhu's issue lies in its quality inspection system, which becomes "selectively blind" due to evaluation pressure. Technologies like AI front desks and bedding chips can only optimize processes but cannot address the fundamental contradictions of franchisees not having profit maintenance standards and managers not daring to report issues.
In one sentence: What Huazhu lacks is a system that allows problems to be exposed.
5. Reforming Incentives is the Solution
The solution to Huazhu's problems lies in reforming its incentive structure:
- For franchisees: Link commission rates to the quality of each store (e.g., lower commissions for better service) and include protection policies for opening hotels in close proximity in the contract (not just verbal commitments).
- For managers: Change the evaluation criteria from zero accidents to the rate of issue reporting and the speed of resolution, making it more costly to cover up problems than to admit them.
- For quality inspection: Introduce independent third-party audits (not affiliated with regions) and make the results public for consumer oversight.
These changes require Huazhu to sacrifice some short-term profits (e.g., lowering commission rates and slowing down new hotel openings). If nothing changes, similar issues will continue to occur. Consumers will soon realize the consequences of Huazhu's choices.
In one sentence: If Huazhu wants a long-term success, it must give up short-term gains and turn "quality first" from a slogan into reality.
The essence of this news is that when companies prioritize scale growth, service quality and franchisees' interests are often sacrificed. Huazhu's choices affect not only its brand but also the rights of numerous franchisees and consumers. It hopes to truly prioritize quality and not just talk about it.