He Opened a Hangzhou Hotel on the Strength of Its Design. Now He Has to Keep People There

After years of running serviced apartments, he decided to build a hotel brand.

The Wheat Youth Arts Hotel opened this October on Xingguang Avenue in Hangzhou's Binjiang New District, taking over the 7th, 9th and 10th floors of the Xingguang Center.

Step off the elevator on the 7th floor and you face a display wall laid out with the hotel's signature objects — pillows, bedside lamps, slippers — and, across the glass case, a big bright-yellow "hello."

Walk down this corridor and you reach Wheat's lobby. Call it a lobby, but it looks more like a bookstore: the whole space is bright yellow, and books run from the floor to the ceiling. It upends what people expect a hotel lobby to be.

The front desk is small too, staffed by two young employees who check guests in, walk them to their rooms and answer the phone. Every so often someone drops in just to scope the place out — journalists, people from the hotel business, young people who came for the buzz. Some wander through, take a few photos and leave. Others chat with the desk staff a while, asking about rates and rooms.

The interior is the work of Li Xiang, the designer behind Zhongshuge, the bookstore chain billed as "China's most beautiful bookstore." QDaily has written about a good deal of her work. On the whole, Zhongshuge is dense and dramatic — the design steals most of the books' thunder — but this hotel is far lighter.

International design sites such as Dezeen and Designboom covered this 79-room boutique hotel as soon as it opened. Since then, most guest reviews on Trip.com Group have circled back to the same phrase: "sense of design." Quite a few guests say they came after reading that coverage.

Rooms at Wheat run from 368 to 588 yuan a night. On price alone, that is roughly a mid-range hotel. Add the design, and it looks like better value than most mid-range hotels.

"The first thing everyone does when they walk in is pull out their phone and take a photo." That is the effect Wheat's founder, Zhao Jing, was after. He wanted the design to carry its own talking points, so that sharing on social networks would quickly build the hotel a name among young people — or among people who think of themselves as young.

After Years of Running Serviced Apartments, He Decided to Build a Hotel Brand

By Zhao Jing's account, he had been turning the idea of Wheat over for a long time.

After years in the serviced-apartment business, he made plans in 2014 to start something new, but did not find the right direction right away. So he spent close to a year watching internet startups. "I originally wanted to do a fitness app, but I watched for a year and a half and found that most of them could barely survive." Starting an internet company, Zhao decided, was not as simple as it looked; without a clear way to make money, he would struggle to find a foothold in that enormous wave.

After going back and forth, he settled on a boutique hotel with a personality as the opening he wanted. "Budget hotels have lost their personality and have been sliding for years. High-end luxury hotels? An individual can't run those — too much scale, not a fit," Zhao said.

Wheat's first-phase investment came to about 14 million yuan: Zhao's savings from years in the business, a mortgage on his house, and money the three founders scraped together between them.

Five million of that 14 million came from crowdfunding. With the renovation about half done, in May this year, Zhao published a post on Wheat's WeChat account to raise money — a minimum of 10,000 yuan, a cap of 500,000 yuan. Heavy resharing on Moments brought in more than 1.7 million yuan within three hours of the post going up.

Zhao had planned the crowdfunding from the start. "I signed the lease and brought in the designer without enough money in hand," he said. "I knew my money wasn't enough. Crowdfunding had to be part of this business model — raising money, raising word of mouth, raising a customer base. I just wanted to wait until the hotel at least had some shape to it, so people could watch the process with their own eyes. Once something is actually standing there, people dare to put money in."

Raising 5 million yuan this way was a bold call. What if it fell short? Zhao says the question never crossed his mind. He and his two partners, Wang Dan and Zhou Yuhui, have plenty of friends, and he trusts how things spread on social networks. His years of running hotels gave him further confidence in Wheat.

Zhao thinks location is one of the things that will decide Wheat's occupancy. He compares Hangzhou's Binjiang New District to Shanghai's Pudong and expects big growth here. As he sees it, a hotel in this district can hit 90% occupancy without much trouble. Two hundred meters from Wheat, in another tower, sits Kending Hotel Apartments, which Zhao also founded. He signed Kending's lease six years ago, and the serviced-apartment property is said to have held occupancy as high as 95% ever since, earning him a tidy sum over the years. So his eye for hotel locations, he figures, is at least somewhat reliable.

By Zhao's arithmetic, occupancy above 90% each month puts Wheat's monthly revenue past 1 million yuan, and the whole project is meant to recoup its costs in two to two and a half years.

Wheat's income has several sources. Besides room rates, the café and the prospect of renting out the more open rooftop terrace both add real cash. After monthly operating costs — wages, utilities, repairs and routine upkeep — Wheat's annual profit could reach 5 million to 7 million yuan. That is what let Zhao promise crowdfunding backers an expected return of 20% to 30%.

As for Wheat's other two founders, Wang Dan and Zhou Yuhui, Zhao brought them in after he had already settled an eight-year lease with the Xingguang Center.

Like Zhao, Wang Dan and Zhou Yuhui love to travel, and both had some experience and a following in the lodging market. Zhou had started four youth hostels, none of them large but all well regarded. He founded one of them, Pirate Radio, with Wang Dan; the two met over stories of life "on the road" and ended up going into business together. Wang had turned his travels in Africa into two books, which won him a following of his own.

How Much Does a Designer Matter to a Hotel?

For Zhao, getting Li Xiang to design Wheat was close to the single most important step in whether the hotel would work. He had considered other designers and dropped them as not quite right. Then he saw Zhongshuge and knew at once that this was the effect he wanted.

Zhao kept coming back to the sense of community he wanted at Wheat. Li Xiang's idea was to fill the place with stories. On that they agreed without having to discuss it.

So Li Xiang hid small surprises through the design for guests to find on their own, to draw them in. Chinese checkers and bright yellow are the two core elements of the interior.

On a wall right beside the lobby exit, colored Chinese checkers pieces form a map of the world. Each piece, Li Xiang says, stands for a different kind of person. The stools and coffee tables in the lobby take their shapes from checkers pieces too.

Past the lobby, the guest-room area winds and doubles back. White dominates here, but it never goes flat: light strips built into the gap where the walls meet the floor soften the space.

There are plenty of other surprises along the way — a small corner with a bookcase and a piano, a black pool table, an exercise bike, paintings hung along the corridors, greetings written on the walls, and, if you look up, a ceiling covered in checkers pieces.

At the far end of the corridor is Wheat's café, which serves coffee and drinks and is open to non-guests.

From the wall behind the seats to the bar, this space is packed with books as well. Seven parachutes with little figures hanging from them float against the mirrored ceiling.

Beside the seventh-floor café there is also a 1,550-square-meter terrace. It was used recently as a location for an iQIYI web series, with the café appearing on camera too.

The rooms carry on the same plain style. You will not find a single exposed wire: the cords of the television, the desk lamp, even the kettle are all tucked cleverly out of sight.

The television itself hides behind a painting on the wall, with an easel standing in front of it. Rather than have guests sit in the room watching television, Li Xiang thought, give them somewhere they can settle down and paint. The easel works as a medium between guest and hotel, which makes closeness easier to come by.

Getting Li Xiang to take the job cost Zhao and his partners some effort.

Li Xiang screens clients by standards close to severe, and as her attention-grabbing work has piled up over the past few years, more and more people have come looking for her.

"I didn't know whether their taste matched mine," Li Xiang said. A client has to fully respect the design, she believes, before there is anything more to talk about. So when Zhao and his partners turned up out of nowhere at the end of last year, she was thrown at first. She could not tell how set they were on doing this well — or whether they could.

But Zhao won her over, the same way he had talked the landlord into a cheap eight-year lease for Wheat.

"He's a real talker, a storyteller," Li Xiang said. "He had me laughing in our first conversation."

Even so, Li Xiang held to rules of her own. Her schedule and working habits had to be respected: during the concept phase she needed to stay in her Shanghai office and concentrate, and could not go to the site. Construction later on had to follow the renderings exactly, down to the last detail of the linens.

Zhao agreed to every one of them.

He went further than Li Xiang expected. "The night we sent the quote, he said he wasn't going to knock a single yuan off the design fee. The next day the group of them came to Shanghai to sign the contract, and that same afternoon they wired the deposit," Li Xiang said, joking: "By then, even if I'd wanted to back out, I couldn't."

Li Xiang's fee is not cheap — more than 2,000 yuan per square meter. Even after subtracting the repeated layouts within Wheat's 4,550 square meters of interior, the design fee for the hotel came to more than 1 million yuan.

"He never told me what the ceiling was. He only said, I want this effect, and I'll work out the rest," Li Xiang said.

Beyond the design fee, every piece of furniture in the hotel is Li Xiang's as well. As in the hotels she had designed before, she holds that furniture is a key part of the interior and should be worked out alongside it. So she took on the furniture along with the renovation. Which meant Wheat's custom pieces cost a fair bit more again.

It Is Not a Perfect Piece of Work

When we went to Wheat to report this story, the corridor outside the rooms on the 10th floor was still having its walls patched. By then Wheat had been open for more than a month.

Li Xiang had figured at the outset that, since the floors Wheat occupies have windows on both the north and south sides, the right number of rooms would be around 40. Wheat ended up with 79, some of them cheap windowless ones — sold as "Little Wheat King Rooms" at 368 yuan a night. They sit along the passage from the lobby to the café, and because rooms were carved out of the middle of that passage, the whole route is irregular, more like a maze; you have to follow the arrows carefully to find your way.

But weigh the return on investment. At 40 rooms, and holding the current prices, recouping Wheat's costs would be long and uncertain. Getting to break-even under that pressure would mean raising prices — and pricing too high would betray Wheat's aim of being an urban boutique hotel that stresses value for money.

Zhao and his partners ran into trouble in the construction phase as well.

Zhao, Wang Dan and Zhou Yuhui all had experience running places to stay. But watching an empty building actually turn into a finished hotel was a first for the three of them. The serviced apartments Zhao had run came already fitted out; he only had to put his energy into operations and management. The hostels Wang and Zhou ran involved no renovation or construction either.

The construction crew they hired had plenty of experience with conventional interiors, but against a concept design as unusual as Wheat's, that experience ran short. The effects promised in the renderings proved hard for the crew to deliver in full.

When Li Xiang talks about what she regrets in the Wheat project, almost all of it goes back to this construction phase.

They spared nothing on the design fee, but Zhao and his partners did not have much room elsewhere.

They chased the most complete version of their ideal design and held nothing back in building a friendly, open space that would pull people "out of their rooms." That included the books filling whole shelves, and the exercise bikes, pianos and pool tables spread across the floors.

Li Xiang argued against the bookshelves at first. "Bookshelves are too expensive — not the shelf, the books. Filling a shelf this size costs a lot of money on books alone." Given how thin the budget already was, she thought, there was no need to go to such lengths for bookshelves.

Zhao thought the shelves were one of the most important parts of the hotel. A shelf full of books, he believed, builds a warmer sense of community. He ended up spending some 70,000 yuan on new books. Add the three founders' own collections and the books Li Xiang gave, and Wheat holds as many as 10,000 volumes.

Money that is not quite enough means that chasing an effect costs you something else.

White tile replaced marble, for instance, along with other "cost-saving" moves during construction. That is why Wheat spent more on patching up afterward than it had expected.

Guests put it more bluntly. On Trip.com Group, some praised the design and questioned the rest in the same breath: "A hotel with amazing design, very artsy, very young. Since it just opened, a lot of details still need adjusting." (id: Mudan Huakai) "Were they rushing a deadline? A lot of details, like the sealant on the glass, are sloppily done." (id: YGDD) "I hope the hotel tightens up its housekeeping." (id: Shuiyun Zhijian 8386)

Pretty design photos on social networks can only make people want to come. The real question is how to keep them there. A hotel sells service, and the things you cannot see are usually the ones that matter most.

Images from: archdaily

Photography: Shao Feng