China's oldest and largest budget hotel chain Jinjiang Inn Co Ltd will add 400 new facilities, with 200 in service by 2010, the company said.

 

Shanghai-based Jinjiang Inn currently has more than 200 outlets, according to its president Xu Zurong.

 

East China and the Yangtze River Delta account for 62 percent of the company's operations. It will expand in Beijing, Tianjin, the Bohai Bay area and the country's provincial capitals and regional economic centers, Xu told China Daily.

 

Under the plan, most of the US$310 million raised last December through its parent company Shanghai Jin Jiang International Hotels (Group) Co Ltd's Hong Kong listing will be used to finance the budget hotel chain's expansion.

 

Xu said acquisitions, leasing and franchises will be the company's three main avenues for growth.

 

"In the last decade, Jinjiang Inn has successfully switched from the management of individual businesses to brand management and operation," he said.

 

Xu said the number of franchise businesses will increase as the company further strengthens its management.

 

"The franchise business is a double-edged sword excessive growth might ruin the brand," he said.

 

But Xu welcomed competition from domestic and overseas players in the thriving budget hotel market.

 

"Without competition, we cannot develop," he said.

 

"With more competitors on the scene, our strategy is simple to do a good job with our products and market," he said.

 

Jinjiang Inn has maintained an average annual occupancy rate of over 90 percent since it opened its first outlet near the Jinjiang Amusement Park 10 years ago.

 

China's budget hotel sector is booming as the tourism industry grows and the Beijing Olympics and Shanghai World Expo near.

 

(China Daily April 24, 2007)