More Rooms at the Inn

Related entries: Business Issues, Consumer Market, General, Investment, Services, Strategy

My recent post about high and low-end hotels in China noted a wave of development in the sector. The latest news adds several at both ends of the spectrum:

    • InterContinental Hotels and Resorts are adding seven new locations (two in Sichuan – Chengdu and in Jiuzhaigou Scenic Area- and others in Ningbo, Qingdao, Sanya, Nanjing and Shenzhen)

    • Home Inns & Hotel Management Inc., which just listed on the Nasdaq (rising 72 percent on opening – quite a bit better than ICBC!) operates 82 budget hotels in the mainland

As with the InterContinental developments, Home Inns is building properties outside of the primary cities (though they still need capacity too). They are targeting “100 cities with populations of 4 million or more”.

If the frilly, poorly serviced, provincial hotels I have stayed in over the years are anything to go by, including a certain well-known international brand (hint: locations include Xian and Hangzhou) that should know better than to provide damp, smelly rooms and rude – local and foreign – staff), either of the above would likely be attractive new alternatives!

More hotels, great and small, will follow – and Home Inns rival, Jinjiang International, may be next, with an estimated $300 million IPO in Hong Kong later this year.

The development of hotels indicates a booming business and tourist market, but their location is also a reminder of the fact that secondary cities (many unheard of in London and New York) are increasingly becoming the battleground for the emerging Chinese consumer. Beijing, Shanghai and Guangzhou are just too competitive (and comfortable) these days…

For more on China’s travel and tourism sector, see details of a confernce we are co-hosting in London on 6 November: China – The Future of Travel.

See news sources:

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