Summary of Key Points
In recent years, many “Double First-Class” universities have established campuses in county towns, and it is even possible that every county will eventually have a university. A large number of college students are moving to these areas, boosting the consumer markets for dining, hotels, and other services. The hotel industry, in particular, is seeing new opportunities as students not only stay in hotels to improve their accommodation but also for the “emotional value” they provide—such as private space and a sense of relaxation. However, there are hidden concerns with establishing universities in county towns: high construction and operational costs, and a potential decline in the birth rate, which could lead to a reduction in the number of students. Hotel investors need to be cautious and wait for data from the first batch of students to choose the right type of hotel and location to minimize risks.
Why Are There Suddenly So Many Universities in County Towns?
In the past, county-town universities were not even considered by students when choosing their colleges. But now the situation has changed. Counties such as Yiwu in Zhejiang, Kunshan in Jiangsu, and Feixi in Anhui all have universities, and Lingshui in Hainan (with a permanent population of only 380,000) has brought in 30 prestigious domestic and international schools, transforming from being unknown to becoming a model for university expansion. There are two main reasons for this:
- Policy incentives: For example, Lingshui has attracted universities by being designated as a national education pilot zone;
- Local demand: Economically strong counties want to enhance their soft power, while less developed areas (like Hongan in Hubei, which was just lifted out of poverty in 2018) hope to attract visitors and boost consumption through universities. A professor from Tsinghua University has even suggested that a community or vocational university should be established in every one of the country’s 2,000 counties, which would mean almost every county town could have a university.
How Much Can Hotels in County Towns Profit From the Arrival of College Students?
The spending power of college students cannot be underestimated. The annual consumption of college students nationwide is expected to exceed 1.3 trillion yuan by 2025. There are several solid reasons why hotels can benefit:
- Real demand: Hotels around university campuses are already doing well (for example, there are hundreds of hotels within a kilometer of the Chang’an campus of Shaanxi Normal University);
- Upgrading demand: Students now stay in hotels for comfort (lack of private bathrooms, poor sound insulation), and for emotional reasons—staying in hotels during exam weeks to use air conditioning or sleeping in on weekends;
- Hotels are adapting to students: They offer free study rooms, buy-one-get-one-free coffee offers, and student discounts.
For instance, a county town in Anhui with 20,000 college students can generate hundreds of thousands of yuan annually for local businesses like baozi shops (steamed buns) and taxis.
What Are the Hidden Challenges of Establishing Universities in County Towns?
Despite the benefits, there are several issues:
- Financing: Building universities is very expensive. For example, Liyang spent 4.5 billion yuan to attract Nanhang University, and Dawu County spent 2.1 billion yuan to bring in a vocational college. If every county town builds a university, the annual operating costs would amount to 2 trillion yuan, which many counties in central and western China cannot afford;
- Future student supply: Birth rates are declining, and the number of high school graduates will decrease. By around 2032, the number of college students will peak and then start to fall. Without enough students, universities in county towns will struggle, and related businesses such as hotels will suffer.
Should Hotel Investors Enter the Market Now or Wait?
The advice is to wait and be cautious:
- Choose the right timing: Signing a contract does not mean the university will be built; it can take 3–5 years from signing to enrollment. Hotels are long-term investments, so it’s better to wait for data on the actual spending habits of the first batch of students before making decisions;
- Select the right type of hotel: Avoid high-end hotels in county towns, as they carry higher risks. Choose mid-range or economy-friendly chains (such as Hanting or Quanji) and adjust services to local consumer preferences (e.g., adding study rooms);
- Operate wisely: Locate hotels near universities to attract students and manage peak and off-peak seasons effectively—school openings, exam periods, and holidays are busy times, while winter and summer vacations offer opportunities to attract local residents and tourists.
The Long-Term Significance of University Establishments in County Towns
The presence of college students brings more than just increased spending; they bring vitality to the county towns and can attract investment from businesses that need skilled workers. For hotel investors, the opportunity is not about easy profits but about understanding the local reality: does the county have enough financial support for university operations? Will there be a steady supply of students in the future? After carefully considering these factors, investors can make a rational decision.
In summary, the trend of universities in county towns opens new opportunities for the hotel industry, but it’s not about easy profits. To benefit, one must timing their entry and calculate the costs carefully, avoiding being blinded by short-term trends.