[photopress:hotels_motel168.jpg,full,alignright]A most excellent article by Jon D. Markman analyzes the economy hotel situation in China from an investment perspective. It is totally positive. You can read the whole article by clicking on Source at the end.
He writes that there is a rising need for more hotels. Domestic tourism is growing at 10.4% per year and will amount to 8% of China’s national GDP by 2017, according to government statistics, compared with 5.4% today.
Biggest growth area is budget hotels. 90% of Chinese travelers stay at budget inns where they can find standardized rooms, comfy beds, great locations near business centers, free Internet access, hair dryers and ironing boards for the equivalent of $22 per night.
The leading brand for inexpensive hotels Home Inns and Hotels Management, which reported $95 million in revenue in the past 12 months and $5.4 million in income.
Analysts report that the number of budget hotels has grown from fewer than 100 in 2003 to around 1,300 this year.
Home Inn executives, several of whom were founders of the successful travel agency Ctrip.com International, say that they plan to add 100 hotels a year to achieve that 60% annualized growth rate.
Home Inns is believed to own about 18% of the market, a percentage point above its older but slower-growing arch-rival, the Jin Jiang Inn chain.
Accor, the French chain, has announced plans to open 20 of its Ibis budget hotels over the next year.
Motel 168, a slightly more upscale chain seen in our illustration, is backed by Morgan Stanley.
7 Days Inn is being backed by Warburg Pincus.
The Super 8 hotel chain already has 49 budget hotels in China.
These are all, perhaps, paltry numbers with an industry still in its infancy.
Source: The Street