If it was not enough to announce its new Pullman line Robert Murray, Accor’s assistant president for the Greater China Region said global hotel chain Accor plans to open between 15 and 26 hotels under its economy hotel brand name of Ibis in 2008 and 2009 in China.

By the end of 2008, Ibis will be in Beijing, Shanghai, Guangzhou, Suzhou and Harbin. The Ibis hotels are expected to serve businessmen in the country’s second-tier and third-tier cities, where costs are relatively lower.

Accor has opened 12 self-run Ibis hotels in China since its entry, compared to many other foreign hotel giants, which mainly manage hotels for local businesses.

There is still room for the growth of the Chinese economy hotel market, said Robert Murray, who disagrees with the widespread belief that it would suffer a hard landing in the near future.
Source: Trading Markets

After nearly four years in China and 48 signed hotels, Days Inn China is now planning to double its growth rate in 2008.

To achieve this goal, Days Inn China is adding a new leasing business to its existing management and franchise model, where leasing and converting existing properties will become a significant part of its growth strategy.

Days Inn China is now exploring partnership opportunities with real estate owners nationwide.

In the near future, Days Inn China’s leasing business will undoubtedly parallel the growth seen with its existing franchise and management divisions.

Harry Tan, CEO of Days Inn China, said, ‘People tend to believe that luxury hotels and budget hotels enjoy a better positioning than mid-range hotels. We, however, have a different viewpoint. The pricing of high-end hotels is getting increasingly prohibitive, which as a result makes some guests turn to more affordable alternatives. At the same time, more and more business travelers are beginning to seek out more comfortable accommodations with higher standards. We recognize that the majority of leisure travelers today have increasing levels of discretionary income and would prefer mid-range hotels over budget hotels.’

Days Inn’s parent company Wyndham Hotel Group is the largest hotel group in the world, with more than 6,400 hotels worldwide representing more than 535,000 rooms. Days Inn has over 160,000 rooms in more than 1,800 hotels on five continents.

Days Inn China has almost 12,000 rooms in 16 provinces covering 29 cities, including provincial capital cities, second and third tier cities.
Source: Xinhua PR Newswire

Super 8 China of the USA has been named as one of the ‘Best Employers in the China Hospitality Sector.’ This was announced at the China Hotel Industry Annual Human Resources Meeting held in Guangzhou. The event was co-hosted by China Hotel Magazine, Chinese Tourism Newspaper, Chinahotelhr.com, and China Hotel Industry Celebrity Club.

The award was based on national staff surveys, online and short message voting, and third-party expert reviews. Super 8 was recently appointed to the Beijing Olympic Village Management Team.

Mitchell A. Presnick, chairman and CEO of Super 8 China, said , ‘Super 8 China places great importance on contributing to the stable development of the Chinese economy hotel sector.’

Fang Guofan, Super 8 China’s senior vice president, said, ‘Super 8 China operates under three core values: “Super 8 Loves China”, “We Put People First”, and “Trust, Success, and Fairness”. It is gratifying to see the hospitality sector recognize our efforts.’

Super 8 Motels is one of the world’s largest economy lodging operators, with almost 2,100 hotels worldwide. The first Super 8 opened in Aberdeen, South Dakota, USA in 1974, charging US$8.88 per night.

Super 8 entered the China market in 2004 and opened its first hotel in Beijing on June 8, 2004. So far, the company has approximately 130 hotels either open or under construction in more than 70 cities across China.
Source: Earth Times

There is a long and detailed report in 4Hoteliers dealing with economy hotels in China. It is very comprehensive and some of the facts are fascinating and surprising. For example, despite all of the activity and profitability dealt with in the report one fact stands out:

Currently, economy hotels represent just 10% of the overall hotel industry in China. Which means it has a long, long way to grow.

The report states that since the first opened in 1997, economy hotels in mainland China have spread far and wide. To a small extent his is because of tourism, both from overseas and, more importantly, domestic.

China has become an important tourism destination in Asia and the fifth-largest tourism country in the world. However, domestic tourism alone generated US$781.9 billion last year, nearly 20 times the revenue of 2000.

A study conducted by the Chinese Academy of Social Sciences (CASS) Tourism Research Center showed that 90% of economy hotel guests are domestic travelers and 10% are inbound travelers.

This study also reported that business travelers are the major demand generators for economy hotels, representing roughly 65% of the economy hotel market in 2006.

The meeting and group contingent comprised 9% of the total, and leisure demand generated the remaining 26%.

To read this detailed and fascinating report click on Source.
Source: 4Hoteliers

In 1999 Ji Qi founded Ctrip, a new internet firm, and hit on a vast, untapped area of demand: the Chinese traveler. After the online travel agency came Home Inns, an equally successful chain of basic hotels. Nine years later, Mr Ji is on his third company for travelers: Hanting Hotels.

Hanting Hotels is less than three years old but already has 75 outlets. Occupancy averages 90%, after being open for just three to four months.

Customers are mainly Chinese business people who want clean rooms, a desk, a television and internet service. Room prices are modest — under $40 a night. A second brand, Hanting Express, will soon be launched with prices from $15 to $30 a night, aimed at non-business travellers, with even more austere fittings. The aim is to have 1,000 outlets within three to five years.

When Ji Qi founded Ctrip there were no automated payment systems and no private travel firms. Ctrip sends out motorcycle couriers to take the cash payment and deliver tickets. Revenues at Home Inns, the first of the affordable chains, are growing at more than 70% a year and the net income is rising faster still.
Source: The Economist

Olympic organizers in Beijing have announced that there are 132 official reception hotels for this summer’s games. The Beijing Organizing Committee for the Olympic Games said there are 120 contracted hotels for the event providing 30,000 rooms for the duration of the games.

The organizers said 38 are five-star hotels, 45 are four-star, 22 are three-star and 15 are not yet star-rated. The average room rate for a double room in a five-star hotel in Beijing will be $383 and $295 on average in a four-star hotel.

The other 12 official reception hotels are in six co-host cities, including Hong Kong, Shenyang, Tianjin, Qingdao, Qinhuangdao, and Shanghai.

In 2007, during the inaugural ‘Good Luck Beijing’ event, more than 40 designated hotels were given to some 8,000 athletes, officials and media staff. The event was designed to test the games organizing committee’s efficiency and readiness.
Source: AHN

Accor Asia Pacific boss Michael Issenberg, is packing up and moving the company’s regional headquarters to Singapore. He said the siren call of China and India — where Accor is now developing 100 hotels with plans for many more — has proved impossible to resist.

Michael Issenberg said, ‘It was inevitable and could not be put off any longer. The weight of development is now in Asia — we now have more than 330 hotels through the Asia-Pacific region, with more on the way.’

Issenberg sees the biggest opportunities in China.

He said, ‘China is unbelievable — what a future it has. I know my own industry is booming but that is only one small part of a very large picture — I can’t even imagine what is happening elsewhere.’

More than anything else, Michael Issenberg says it’s the speed of change that is most confronting.

He cites an Accor development near Hainan Island in which a 440-room ‘absolutely deluxe five-star hotel’, a 1,500-seat convention centre, a road and bridge were built in just 11 months.

He said, ‘In other places you are shown master plans and it may or may not happen, but in China it always does.’

Accor is putting its own money into the country and wants to own 200,000 rooms in China by 2010. It’s already well on the way, with 60 Ibis budget properties under construction in high-growth areas.
Source: The Australian

Early this year Home Inns, a leader economy hotels in China, announced it had 26 chain hotels for RMB340 million from Shanghai Top Star. So far, it is the biggest example of merger and acquisition within China’s sector of economy hotels.

Economy chain hotels are in an era of brand integration in which purchases, mergers and acquisitions wiill become the rule rather than the exception.

As shown in the 2007 Annual Report on China’s Economic Hotel Industry, which was issued by the ministry of Commerce and the China Hotel Association, by the end of 2006, there were nearly 100 economic hotel chain brands in the market for China’s lodging industry and over 1,000 hotels with over 100,000 rooms had been set up.

In the coming few years, the result of competition is likely to be that a large number of minor brands will be merged and acquired by several major brands like Home Inns, Holiday Inn, Star of Jinjiang Group, and Super 8.

As shown in the report, the occupancy rate for economic hotels in China has fallen by nearly 7 percentage points from the annual average of 89% in 2005 to the annual average of 82.4% in 2006.

In the meantime, the average guest room price decreased from RMB328 in 2005 to RMB209.

On the other hand, the property management costs for economic hotels increased by 40% in 2007 in comparison with those in 2006.

These are the problems. Consolidation of brands is possibly the solution.
Source: China Economic Net

Times look good for the backpacker hotels. There are a lot of backpackers around.

Times look even better for the economy hotels especially in China. Offering a clean, well maintained room for the night with Internet access means boom times. Look to see the number of economy hotels expand by at least five times, perhaps more, over the next few years.

At the top, the super-luxury hotels where someone else is typically paying the bill all seems to be well. There are spas, shopping arcades, superior restaurants, concierges who seem to use telepathy to guess what you want. All of it comes at a price but there are apparently many willing to pay that price.

It is in the middle echelons that times are hard, where the independents, and to a lesser extent, the chains, face lean times.

Some of the mid-range chains are rebranding to make themselves more attractive.

Holiday Inn, the world’s biggest hotel chain, is spending, as a first stage, US$1 billion in rebranding.

Accor, the French hotel giant, is going to push Sofitel from being merely an upmarket chain to a luxury brand.

The writer had an amazing lunch in the Sofitel Wentworth last week — someone else was paying — where the food, the wine and the service were worthy of a good restaurant in Paris. Except no Parisian restaurant has, I promise you, a female Irish Japanese sommelier.

There is a problem. If a mid-level hotel spends enough money to push it up at least one, preferably two levels, you are talking very serious money. Most independents in China at this level cannot afford it. They will have to either repackage as a budget hotel or suffer.
Source: Times on Line

Last week an official of Accor said that the future expansion of Accor in China will be with Ibis, the Accor budget line. And the plan is to add another 100 hotels within China in this group. Meanwhile Home Inns, probably the biggest player in the China budget market, is considering expanding outside mainland China, mostly in Asia, within two to three years.

May Wu, its chief financial officer said, ‘Our customers … are by and large domestic business travelers. They are traveling overseas. We want to be where they travel to.’

May Wu said in China Home Inns want to increase so that it has more than 30% within five years as opposed to 20 to 25% at present. It will quadruple its number of outlets to 1,000 in three to five years.

(Whether that it gives it 20% of the market now is open for debate. An informed guess would be it probably has something nearer 18% at the moment although that very much depends on how you define budget motel. In October Home Inns acquired Top Star in a RMB340 million ($45.6 million) deal. It still intends to grow organically but would not automatically reject further acquisitions.

May Wu said, ‘Top Star is one big step and a big milestone for us. We would continue on this path when the right opportunity presents itself.’