[photopress:Home_Inns.jpg,full,alignright]China’s budget hotel industry has started to move forward at high speed. The two biggest budget hotel chains in China, Home Inns and Jinjiang Inns last year had excellent growth. Both are domestic brands, which more than 100 outlets across the country. Both also went public on the stock market, with Home Inns listing on the American Nasdaq and Jinjiang Inn listing on the Hong Kong Stock Exchange. Shanghai Motel Management, which runs the budget hotel brand Motel 168, also received US$20 million in investment from Morgan Stanley.
These listings have encouraged these chains to expand quickly.
Shen Han, a researcher on tourism management and the hotel industry at Hong Kong Polytechnic University, said, ‘Their good performance in the capital market reflects investors’ optimistic attitudes towards the profitability of Chinese budget hotels and the domestic tourism market.’
A study conducted by the National Development and Reform Commission (NDRC) showed that the country had about 50 registered budget hotel chains with more than 600 outlets in operation by the end of 2005. Now the figure is approaching 1,000 with major budget hotel brands expanding at an average growth rate of 74% annually.
The NDRC’s research also showed that budget hotels were most popular in East China, where 60% of the hotels are located. Shanghai, for example, is not only the base for brands like Home Inns, Jinjiang Inn and Motel 168, but also a haven for other individual economy hotels.
Source: The Star Biz China