Diehard Gamers Drive Demand for Esports Hotels in China – BNN Bloomberg

(Bloomberg) — Zhu Hao, an office worker in his twenties, recently checked into a hotel in the southern Chinese city of Shenzhen for a weekend with a couple of friends. Their plan: play video games until the early hours of the morning, order and maybe relax with a quick massage.

“It’s boring to play alone,” said Zhu, who enjoys spending time playing games so much that it has become an almost weekly routine. “And here at the hotel, my parents can’t nag me or interrupt my games.”

The Jinnang E-Sports Pan-Entertainment Hotel, where Zhu and his friends are staying, is one of hundreds across the city catering to die-hard gamers looking to play games like League of Legends or PUBG Battlegrounds against other groups online. It offers dorm-like rooms with five bunk beds and luxurious play areas with huge monitors and comfortable cushioned chairs. To keep gamers fueled, his pantry stocks a variety of instant noodles and other snacks.

Similar specialty hotels are popping up across Asia, from Hong Kong to Japan, Malaysia and Singapore, amid a craze that has captivated casual players and given rise to professional leagues offering millions of dollars in prize pools. Nowhere is demand greater than in China, where there are more than 21,000 such hotels, according to video game market research firm Niko Partners.

The popularity of such holidays also provides insight into a cultural shift taking place in China, where young people, often referred to as the “bed-ridden generation”, are living less demanding lifestyles and focusing on leisure time with friends.

“This new generation of Chinese youth does not yet understand the importance of saving money,” said Zhang Zijun, who runs a nearby rival hotel above a pizzeria that is part of the e-sports chain Yueta. “They don’t really care about prices as long as they are reasonable. They care about how big the bed is and whether it’s comfortable to play games with friends in.”

Zhang, who is in his 30s, wearing glasses and a black button-down shirt with rolled-up sleeves, said the hotel’s target customers are like him: male office workers in their 20s and 30s who have a “heart for gaming ” The 40-room hotel offers guests a choice of hundreds of items and 24-hour technical support. The average occupancy rate is 92%, with weekends usually fully booked, leaving his cleaning crew little time to rest, he said. Although the majority of clients are young men, one of the rooms has pink walls, chairs and LED lighting that will appeal to women.

The hotel’s public areas and hallways are often empty, and guests stay in their rooms until the early hours of the morning to play video games. Many people extend their stay by one night. In October, a group of friends checked in for one night and ended up staying for eight.

“They kept playing games in the room and ordering piles of food,” Zhang said. “Our cleaning lady took out two giant bags of trash.”

Unlike the United States or Europe, where gamers typically play online at home, in China and other Asian countries esports is more of a face-to-face social activity where friends gather in public places.

During Covid, the number of hotels catering to gamers has surged as ubiquitous internet cafes have been closed due to crowd restrictions. Since the pandemic, gaming cafes have struggled to compete, with four friends sleeping together for just $14 per person per night, much cheaper than paying the cafe’s hourly rate.

“It’s more profitable to pool resources and chat with friends than to invest in your own gaming device,” said Alexander Champlin, senior esports analyst at Niko Partners. “If you’re all playing together in a hotel room, it’ll be easier to discuss strategy.”

Some properties, like the E-Blue Esports Hotel in Zhongshan, about 90 minutes from Shenzhen, are truly space-age. The lobby and hallways glow with blue LED lighting, and the rooms, with pod beds and rows of computer screens, look like a set from a sci-fi movie. A room for three nights for four people in total can cost up to $200. And although they are fully booked on weekends, manager Li Wei is wary of nearly a dozen competing hotels within a 2-mile radius. A rival esports hotel chain recently went bankrupt due to price competition and was soon taken over by a new owner, Lee said.

“The competition is tough,” he said.

China strictly regulates the gaming industry to combat addiction, including restrictions on the amount of time minors can spend playing online games. But the government has also identified esports as an engine of economic growth. In a sign of official approval, President Xi Jinping attended the opening of last year’s 19th Asian Games in Hangzhou, where competitive video games were eligible for medals for the first time.

The August release of Black Myth: Wukong, a blockbuster that follows the adventures of an ape warrior, gave the industry another big boost. The Chinese-made game has boosted sales of game consoles and hardware and benefited esports hotels, according to Niko Partners’ Champlin and hoteliers.

There are about 490 million e-sports gamers in China, with revenue growing 4% this year from nearly $3.7 billion in 2023, according to the Electronic Sports Committee of the China Audio-Video and Digital Media Association.

The Chinese eSports lodging market alone generated about $2.7 billion in revenue last year, according to a report from Ctrip.com, the country’s largest online travel agency.

Shenzhen, better known as a hub for consumer goods and electronics, is an eSports epicenter with more than 350 hotels catering to gamers. The city offers subsidies to encourage a competitive gaming industry and has at least eight esports clubs that field teams. Large and small investors are getting involved. Fosun International, the conglomerate that owns English Premier League soccer club Wolverhampton Wanderers and affiliated esports club Wolverhampton Wanderers in China, is planning to open its own gaming hotel.

“Industries looking to reach younger audiences are paying close attention to the esports sector,” said Teng Feifei, vice president of Fosun Sports Group. “One of the fastest growing developments is the integration of esports with hotels and cultural tourism.”

This integration is also evident in Malaysia. SEM9, an organization that has professional teams competing in tournaments such as League of Legends and PUBG Mobile, has also expanded into hospitality. SEM9 CEO Kevin Wong bought a struggling 3-star hotel near the airport in the bustling city of Johor Bahru in 2022 and renovated 44 rooms over two floors to cater to video game enthusiasts. Occupancy doubled to more than 40% once the arcades were sold, Wong said.

Now he’s reaching out to other hoteliers around the country to help them refurbish their rooms to appeal to gamers.

“There are so many opportunities for esports hotels in Southeast Asia,” Wong said. “The audience is here and the field is wide open.”

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