Despite the decline in the tourism market, budget hotels like 7 Days Inn and Home Inns are enthusiastic about expansion in Zhuhai, Guangdong.
Since 2005, 7 Days Inn has been focusing on expansion in the first-tier cities and Chinese capital cities, but it has now decided to use the new investment it has raised to expand in second tier cities such as Zhuhai. According to Zhu Huaisheng, a vice president of 7 Days Inn, the room occupancy of 7 Days Inn outlets in Zhuhai has remained above 90% since the Spring Festival.
A representative from Home Inns has told the media that the global financial crisis has not affected the room occupancy of Home Inns in Zhuhai and the room occupancy of Home Inns Zhuhai has stayed at about 95%. The representative added that the first direct-operating Home Inns hotel in Zhuhai has already earned back its investment and there are plans for expansion. The hotel chain expects that the number of properties in its portfolio in Zhuhai will increase to six by 2010, up from the current three.
Another budget hotel, Motel168, is also seeking a location for a new outlet though the hotel company said its occupancy rates had declined a little compared with the same period of last year. The hotel group is optimistic that Zhuhai tourist numbers will not decrease too much.
According to the Chinese Hotel Association, in the coming decade, budget hotels will provide more rooms than star-rated hotels and they will become the mainstream of China's hotel industry. Zhou believes that Zhuhai's budget hotel market is under-developed with too many local brands and too few national brands.