The battle among budget hotels to win business travelers in China is set to intensify as major market players both from home and abroad said they will stick to ambitious business growth plans despite the global downturn.

A few days ago, Home Inns & Hotels Management Inc, China's largest budget hotel chain operator, launched in Shanghai its first H Hotel, a brand targeting mid to high-end business travelers, as part of its corporate strategy for diversification.

The Nasdaq-listed company, which runs more than 500 Home Inns in nearly 100 cities across the country, said the new upmarket brand - the firm's second - is positioned between three and four-star hotels.

"This is an aggressive step by Home Inns & Hotels to seek more profit because upmarket brands usually have larger profit margins than budget hotels," said David Sun, chief executive officer of Home Inns & Hotels Management Inc. "Though the two brands - H Hotel and Home Inns - are differently positioned, hotel service is basically the same, and we do hope the success achieved by our Home Inn brand will be shared by H Hotel in the future."

Under the company's initial plan, the new upmarket H Hotel brand will also be introduced to Beijing later.

Located on Caobao Road in southwestern Shanghai, H Hotel charges between 600 yuan and 900 yuan (US$87 to US$130) a night, compared with around 200 yuan at most budget hotels in town.

Meanwhile, the hotelier's main budget hotel brand, Home Inns, will continue to grow as planned. Ye Bingxi, a public relations officer with the company, said about 160 new Home Inns will be opened next year in the country, despite the worldwide economic slowdown.