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China sees further consolidations in the economy hotels sector

02/02/2016| 5:06:18 PM|

In December 2015, BTG Hotels Group acquired Homeinns Hotel Group for RMB11 billion while this month, Homeinns bought a new long-term rental apartment brand ‘Douhao Apartment’, which has seven apartments, totalling 600 rooms.

In December 2015, BTG Hotels Group acquired Homeinns Hotel Group (HMIN), a leading economy hotel chain in China, for RMB11 billion.

Last week, Mr. Duan Qiang, President of BTG, said that while on one hand the reason for this acquisition is to grow BTG’s business in the mid- and low-end hotel markets, on the other hand, this is a strategy for BTG to enter the long-term rental apartments market.

This month, Homeinns Group bought a new long-term rental apartment brand ‘Douhao Apartment’, which has seven apartments, totalling 600 rooms, in Shanghai, Shenzhen, Guanghzou and Xi’an.

In 2015, a palpable fear of oversupply prompted many economy hotel chains in China to venture into long-term rental apartment products.

Statistics indicate that while the cost of building such a product is RMB2 million cheaper than a same scale economy hotel, the revenue generation is higher than the latter.

Considering the cost benefits and ROI, long-term rental apartments are soon expected to become a new trend in the hotel industry.

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TAGS: Homeinns | BTG Hotels | M&A
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