[photopress:jinjiang.jpg,full,alignright]Low and medium-grade star-rated hotels and budget hotels make up more than 90 per cent of the total number of hotels in China. The first budget hotel brand in real sense in China came in 1997. Now there appear to be three groupings.
- Nationwide budget hotels brands, such as Home Inn and Jinjiang Inn.
- Regional brands, such as Motel168 in Shanghai, 7 Days Inn in Guangzhou, and Jins Inn in Nanjing.
- International hotel management groups, such as Accor Ibis of France (which is arguably either the largest or one of the largest hotel chains in the world) and Super8 of the US.
This is what they plan to do:
- Home Inn plans to open 200 hotels by 2008, and get listed.
- Jinjiang Inn intends to develop 200 in the next 3-5 years, and eventually open 1,000 hotels around China.
- Accor aims to open 50 Ibis hotels in Chengdu, Qingdao, and Shanghai within the next five years.
- Super8 plans to sign agreements of intent on the franchising of 68 budget hotels by the end of 2006.
Cost is a problem. As the real estate market heats up, the price of commercial property is continuously rising in big and medium-sized cities across China, and the rent of commercial property is one of the most important parts of the budget hotels’ cost.
Budget hotels also face challenges from human resources, standardized services, and management systems. There are few textbooks for professional management of small and medium-sized hotels. The supply of qualified human resources is relatively limited which means a lot of in-house training.