A Study Of Jin Jiang Hotels For The M&A Motivation And M&A Performance

The hotel industry is closely related to the national macroeconomic and policy.Since 2013,the hotel industry total revenue growth rate began to fall and total operating margins negative.The industry is struggling because of the economic slowdown,anti-corruption,the rising cost of labor cost and hotel market increasingly saturated.In this case,some leading hotel groups begin to expand their scale by M&A to improve market share.They want to improve the business performance by complementary advantages,integration and synergy.From 2015 to 2016,Jin Jiang Hotels acquired Louvre Hoteles Group,Keystone Lodging Holdings Limited and Vienna Hotel,making Jin Jiang Hotels Group become the largest hotel group in China and the fifth in the world.A series of M&A of Jin Jiang Hotels have attracted extensive attention in and outside the industry.Some research institutions believe that Jin Jiang Hotels has made up for the lack of its own hotel market segmentation through M&A,they are optimistic about its future.Other researchers hold the view that after the series of M&A,Jin Jiang Hotels may be "indigestion" for the lack of M&A Integration,and they are worried about its future.This paper puts forward the research question:after the series of M&A of Jin Jiang Hotels,what is its performance?This paper measures the M&A performance of Jin Jiang Hotels based on its M&A motivation and adopts case study method.Firstly,this paper analyze the management difficulties and development opportunities of Jin Jiang Hotels.Secondly,this paper analyzes the motivation of its M&A by combining the market-oriented theory,market power theory and synergetic effect theory.At the same time,this paper studies the M&A performance of Jin Jiang Hotels from the perspectives of short-term market performance and medium and long-term financial performance to judge whether it achieves the M&A purpose.Finally,DuPont analysis system is used to analyze the reasons for the performance changes of Jin Jiang Hotels from the three paths of net operating income interest rate,total asset turnover rate and equity multiplier.The research shows that:(l)the M&A motivation of Jin Jiang Hotels includes improving strategic layout,enhancing market power and improving profitability.(2)from the perspective of short-term market performance,the series of M&A of Jin Jiang Hotels bring short-term wealth effect to enterprise shareholders;From the perspective of medium and long-term financial performance,the series of M&A of Jin Jiang Hotels has improved its overseas and mid-end hotel market layout,increased its revenue scale,market share and market power,but reduced its profitability.(3)The reasons for the decline in profitability of Jin Jiang Hotels include the rapid expansion after M&A,insufficient integration,and the increase of long-term debt,which leads to the increase of financial expenses.