Profits and portfolio grow at China’s biggest hotel group

Homeinns, the biggest hotel group in China by portfolio size, has posted a strong rise in its full-year profits, as it opened more than one hotel per day in 2014.

The Shanghai-based company, which operates more than 2,600 hotels – more than Starwood and Hyatt combined – saw its adjusted net profits jump 26.7% to CNY535.8 million (US$86.4m) last year, following a 5.2% increase in revenues.

Homeinns added 486 hotels to its collection in 2014
Homeinns added 486 hotels to its collection in 2014
“We are very gratified that despite sustained market challenges, we met our previously provided revenue expectations,” said David Sun, the company’s CEO.

“Performance of our mature economy hotels remained relatively resilient despite the market softness. Our franchise-focused strategy, effective cost control and productivity enhancement initiatives did a great deal to help protect our margin and bottom line. We are also very pleased with the positive development and performance of our midscale Yitel hotels.”

Homeinns added 486 hotels to its collection in 2014, or an average of 1.33 new openings per day. In the fourth quarter alone it added 129 new hotels. This brought the company’s total portfolio to 2,609 hotels, including 2,135 under the Homeinn brand, plus 402 Motels, 41 Yitels and 31 Fairyland hotels.

And this rapid growth is likely to continue in 2015; Homeinns said it is aiming “to open no fewer than 400 new hotels in 2015″. These will include the first members of its new upscale brand, Homeinns Plus.

But Sun warned that the company must “be careful in balancing the speed of new hotel development with profitability”.

“The success of our multi-branded platform has given us the confidence to devote more resources to the midscale hotel segment by further accelerating Yitel development and rolling out our new brand, Homeinn Plus,” the CEO said. “We believe that… [we will be] well placed in 2015 to navigate the market and take full advantage of the market recovery when it arrives.

“We remain confident about the long-term prospects of the travel and lodging market in China,” he added.

sourced:traveldailynews.asia