Newly-formed Eastern Crown Hotels Group vies for mid-range market
City Comfort Inn has announced its entry into the mid-range hotel market by launching the Eastern Crown Hotels Group with boutique hotel brands Echarm and eCheng.
TravelDaily Nov/06 - After a booming decade with thousands of new entries, the economy hotels segment in China is grappling with razor-thin profits, prompting major players to shift to the mid-range hotel market with upgraded brands such as Jinjiang’s Metropolo, Huazhu’s J1 and Xincheng, and Plateno’s Lavande, James Joyce Coffetel and Zmax. These mid-range brands cater to their own niche markets in contrast to the homogeneity of the economy hotel chains.
“2014 is the perfect year to enter the mid-range hotel market. Although all the major hotel groups are targeting this area, no brand has emerged as the dominant player yet, so this is an opportunity for our boutique hotel brands Echarm and eCheng to gain a foothold. The concept for our boutique hotels is to cross the style of a star-rated hotel with the efficiency of an economy hotel,” says Eastern Crown Hotels Group CEO Xinhua Cheng.
Compared to other mid-range hotels, Echarm and eCheng hotels have more traditional star-rated hotel amenities, such as dining and lounge areas, to undescore value-for-money. Prices for Echarm hotels start at RMB350 and eCheng starts at RMB450.
“We will open 20 eCheng hotels in the business districts of first-tier cities and the downtown areas of second-tier cities and 50 Echarm hotels in the business districts by the end of 2015. The ratio for directly-managed properties to franchises among our hotel brands is 3:7. This ratio will start at 5:5 for the Echarm and eCheng brands and shift more to franchises in the future,” Mr Cheng told TravelDaily.
IPO in 2017
Currently, Eastern Hotels Group is raising private equity funds in preparation for a public listing in 2017. It already has excellent credit with major banks and can be a guarantor to franchisees for three year bank loans of up to 5 million RMB.
Meanwhile, the group is looking to expand overseas. By the end of September they will have 500 hotels in China and Malaysia and will double that number by 2016.(Translation by David)