Home Inns & Hotels Management Inc, a leading Chinese budget hotel chain listed on the Nasdaq, said it lost 50.3 million yuan (US$7.2 million) in the first quarter of this year despite increased revenue, mainly due to non-operational accounting measures including a significant foreign exchange loss.
Total revenues for the quarter increased 94.9 percent year-on-year to 357 million yuan, including revenues of 28.2 million yuan from its recently acquired Top Star hotel chain, the company said in a filing earlier this week to the United States Securities and Exchange Commission.
"Home Inns demonstrated strong growth during the first quarter by almost doubling the total revenues," said David Sun, Home Inns' chief executive officer. "Although our financial results were impacted by non-operational accounting measures, including a significant foreign exchange loss, our business remains strong and we are successfully managing our rapid expansion into new cities without sacrificing our operational capabilities or the quality of our product offering."
Sun also said the company's large portfolio of hotels under construction has pressured its margin for the quarter, but positions it well for better profitability later on for the year.
Home Inns added 33 new hotels during the first three months, as compared to 11 new hotels opened in the same period in 2007. By March 31, the hotel chain, founded in 2002, ran 299 hotels - 220 leased-and-operated hotels and 79 franchised-and-managed ones - with an average of 122 rooms per hotel, covering 75 cities across the country. An additional 131 hotels are under development, it said.
Occupancy rate for the Home Inns hotel chain was 81.4 percent in the first quarter, as compared to 85.9 percent same time a year earlier, impacted by the lower occupancy rate of the Top Star hotels. Excluding Top Star, the occupancy rate was 86 percent. Home Inns said it plans to open 200 new hotels in 2008.
(Shanghai Daily May 25, 2008)