CHINA - booming budget hotels profit from no frills

eTN, Jan 16, 2008

The number of budget hotel rooms has mushroomed in the past eight years from practically zero to over 100,000 with more than 100 brands competing for a bite of China's rapidly expanding domestic tourism market. More than a 100 brands have emerged.
The fast-developing Chinese budget hotel industry resembles the U.S. motel boom of the 1950s, which was fuelled by tourism and expanding highways.
"China has a population four times that of the U.S, and the potential to be the world's biggest budget hotel market," said Wang Lie, chief financial officer at budget chain Hanting Hotels.
Big and small Chinese investors, plus foreign heavyweights such as Morgan Stanley, Warburg Pincus and Merrill Lynch, are piling into the industry, even though fierce competition and sinking room rates now threaten to hurt profits.

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