[photopress:room.jpg,full,alignright]The continued growth of the Chinese tourist market increases the need for budget hotels. And this has given the budget hotel groups the confidence to spread abroad.
On August 22, Shanghai-based Jinjiang Inn, one of main domestic budget hotel players, announced its first overseas hotel would probably be in St. Petersburg. It will be the first Chinese budget hotel group to open overseas.
In China the competition between the two big players Jinjiang and Home is fierce. Jinjiang Inn is a subsidiary of local hotel giant, the Jinjiang Group. It now has 139 outlets. Two years ago it announced it would open 200 hotels in three to five years. That rate seems to have been speeded up considerably.
Another domestic budget brand, Home Inn, now has 150-plus hotels in over 40 Chinese cities. Home Inn is being jointly developed by Ctrip.com and the Capital Tourism Group. Ctrip.com is China’s biggest online travel agency. Home Inn says it plans to have a total of 180 hotels by the end of this year.
Motel 168 has also expanded its network and now has 21 hotels.
But it is not just domestic brands. The Chinese market is also attracting the attention of foreign hotel groups. The new Super 8 Xiamen hotel is the 42nd in China positioned in 24 Chinese cities with nearly double that planned. International hotel giant, Accor — technically the largest in the world with Novotel, Ibis and others appearing under it flag — currently operates four Ibis budget hotels in China. Ibis plans to increase its Chinese network to 50 by the end of 2008.
There is obiously the risk of over-extension. At the Fuzimiao (Confucius Temple), a wonderfully scenic area in east China’s Nanjing City, 50 budget hotels have gone into operation in the past year. In Zhenzhou, capital of central China’s Henan Province, two dozen budget hotels have opened in the last 15 months. Some hotel operators are already complaining income cannot offset the increased running expenses after becoming part of a hotel chain brand.