Huazhu Hotels to acquire local budget hotel chain Hotel Home
Huazhu Hotels has signed an acquisition agreement with budget hotel chain Hotel Home estimated to be worth around RMB80 million.
ChinaTravelNews - ChinaTravelNews has confirmed with Huazhu Hotels (China Lodgings Group) that the major hotel chain has signed an acquisition agreement with budget hotel chain Hotel Home. While the full details of the acquisition are yet to be disclosed, it is estimated the deal could be worth around RMB80 million if it’s a full acquisition of all Hotel Home properties.
Hotel Home is an economy hotel chain that belongs to Zhongzhou International, the largest hotel management group in China’s mid-west region. Hotel Home is the largest local hotel chain in Henan province with a portfolio of more than 30 hotels covering Henan provincial and neighboring provincial markets.
Huazhu Hotel has been snapping up budget hotel groups – prior to Hotel Home, Huazhu bought Merry Lin Hotels in 2014 and Elan Hotels in 2013，though China’s major hotel groups tend to be conservative towards investing in budget hotels, as the market for budget hotels is showing signs of decline, and some local or regional budget hotel brands have found themselves under constant pressure of competition from famous hotel brands, driving them to look for a way out through acquisitions or mergers.
Capitalizing on this market situation, Huazhu Hotels has been funneling capital into the market to build a critical mass in hotel numbers and coverage to develop a value chain for the capital market.(Translation by David)