Bottom line: China Lodging looks like a good long-term bet to become a leading Chinese hotel operator, drawing on an alliance with France’s Accor in its ongoing transformation to become a manager and franchisor of major brands.
China Lodging transforms
Chinese insurer Anbang is making headlines this week with its surprise and intense bid for US hotel giant Starwood (NYSE: HOT), but an equally exciting hospitality story is happening behind the scenes with the quieter transformation of homegrown hotelier China Lodging (Nasdaq: HTHT). The US-listed hotel operator rose to early prominence with its chain of low-cost Hanting hotels, which have become a mainstay for China’s growing legions of budget-conscious travelers.
But more recently the company, also known as Huazhu, has signed a major tie-up with French hotel giant Accor (Paris: AC), owner of the better-known Sofitel and Ibis brands. That move, a first-of-its-kind for a homegrown Chinese hotel brand, should help China Lodging improve its operations and give it a potential entree onto the global stage. Read Full Post…
Bottom line: Anbang Insurance is paying a big premium for US luxury hotels and may have to sell them for losses when China’s property market corrects, while China Lodging looks like a good bet due to growing profits from its focus on hotel franchising and management.
China Lodging posts big profit growth
A couple of hotel stories are in the headlines as we head into the new week, led by a surprise blockbuster deal that will see Chinese insurer Anbang buy US-based Strategic Hotels & Resorts for $6.5 billion. Meantime, one of China’s largest private hotel operators, China Lodging (Nasdaq: HTHT), has just reported its latest quarterly results that showed a big jump in profitability, as it mimics western peers by focusing on franchising and management services rather than self-developing properties.
These 2 stories both involve hotels but are also quite different, since Anbang’s move is squarely focused on overseas markets and its purchase represents an investment in property ownership. By comparison, China Lodging, owner of the budget Hanting hotel chain, is a domestic story of a company trying to move away from property ownership and into the higher end businesses of hotel management and franchising services. Read Full Post…
Bottom line: New acquisitions by China Lodging and Tongcheng reflect consolidation in China’s travel industry, which is likely to accelerate in 2016 as the nation’s economy slows.
China Lodging goes upmarket with new buy
Two smaller acquisitions from the travel realm are in the headlines as we close out 2015, with China Lodging (Nasdaq: HTHT) and Tongcheng both buying domestic companies. The first deal will see China Lodging, operator of the HanTing budget hotel chain, purchase a smaller operator called Hotel Home. The other comes in the related travel services space, and has Tongcheng buying a smaller rival called Shanghai MCTS.
Neither of these deals looks extremely exciting as both are quite small, but both do reflect a recent wave of consolidation that is sweeping China’s fragmented travel industry. Industry veteran Ctrip (Nasdaq: CTRP) is emerging as the clear leader and top consolidator in the travel services space. The hotel space is a bit less clear, with China Lodging, Homeinns (Nasdaq: HMIN) and Jin Jiang (HKEx: 2006; Shanghai: 600574) all jockeying for position in that space. Read Full Post…
Bottom line: Jin Jiang’s purchase of a large Chinese hotel operator reflects its ambitions to become a leading player in China’s slowing market, though it could be undermined by its roots as a state-run company.
Jin Jiang to take control of Plateno
We’re finally seeing some big consolidation start to happen in China’s crowded hotel industry, with reports that Shanghai-based operator Jin Jiang (HKEx: 2006; Shanghai: 600754) is near a deal to buy the parent of formerly New York-listed 7 Days. The move comes just 7 months after Jin Jiang made another major purchase in Europe, and signals the company is clearly becoming a player to watch in China’s lodging space.
China’s hotel industry is undergoing some major changes right now, as the market suffers from oversupply created during a major build-up in the first decade of the 21st century. Leading player Homeinns (Nasdaq: HMIN) is in the process of privatizing after its stock languished on Wall Street due to lackluster growth prospects. China Lodging Group (Nasdaq: HTHT), operator of the Hanting chain, also made a major move late last year when it announced a major tie-up with French hotel giant Accor (Paris: AC). (previous post) Read Full Post…
Bottom line: A new push into mid-range hotels could provide a boost for Homeinns and other operators, but the relief is likely to be short lived as that part of the market also quickly becomes saturated.
Home Inns goes upscale with new brands
Hotel operators are rushing to fill a relative void in the middle of China’s market, with word that leading budget chain Homeinns (Nasdaq: HMIN) has launched new brands aimed at consumers willing to spend a bit more during their travels. The move looks relatively smart, as growth slows at the top and bottom ends of the market due to overbuilding and a slowing economy that is putting a damper on domestic travel. But Homeinns isn’t the only one to notice this void, and recent similar moves by others could see this middle part of the market also quickly become saturated and oversupplied. Read Full Post…
There’s a bit of buzz in the travel space today, with word of major new initiatives in the hotel and airline sectors for global hotelier Hilton Worldwide (NYSE: HLT) and domestic real estate titan Wanda Group. The former will see Hilton roll out the welcome mat for one of its main low-cost brands in China, taking aim at names like Home Inns (Nasdaq: HMIN) and China Lodging Group (Nasdaq: HTHT). The latter move has Wanda’s talkative founder Wang Jianlin discussing a potential new airline launch, as his company also makes a big push into the travel and leisure sector. Read Full Post…
China’s building economic slowdown isn’t dampening enthusiasm from hoteliers, with word that Starwood (NYSE: HOT), operator of the Sheraton and Westin chains, is about to double the number of its top-end luxury properties in the market. Starwood’s announcement comes just 3 months after US rival Hyatt (NYSE: H) announced its own major China expansion. (previous post) I should be fair and point out quickly that Starwood’s latest expansion isn’t all that large in terms of actual numbers, involving the opening of just 4 new properties. I should also point out that this kind of plan was probably the result of at least 3 or 4 years of planning, meaning work began well before China’s current economic slowdown. Read Full Post…
Leading budget hotel operator Home Inns (Nasdaq: HMIN) has just released its latest results that show continuing weakness at the China lodge, as operators take a double hit from the nation’s slowing economy and a building boom that has led to overcapacity. Home Inns’ latest results continue a trend from last month, when China Lodging (Nasdaq: HTHT), operator of the Hanting chain of budget hotels, announced similar preliminary results that point to a period of pressure on the sector that is likely to last for the rest of this year and quite possibly linger into the first half of 2015. Read Full Post…
News that high-end hotel operator Hyatt (NYSE: H) is launching 2 more brands in China is drawing attention to the market’s growing saturation, boding poorly for all operators as the nation’s economy slows. Hyatt and most of the other big western brands don’t disclose separate operating figures for China, but leading budget brands Home Inns (Nasdaq: HMIN) and China Lodging (Nasdaq: HTHT) act as good indicators for the market. And their latest quarterly results don’t paint a very rosy picture for the industry in the year ahead. Read Full Post…
I have to admit I was a bit surprised to read a report that Jin Jiang (HKEx: 2006； Shanghai: 600754) has become the first of China’s hotel operators to expand on the global stage, with word that the Shanghai-based chain has signed a deal to enter Indonesia. I really expected one of the US-listed Chinese hotel companies like Home Inns (Nasdaq: HMIN) or China Lodging Group (Nasdaq: HTHT) to make that move first, since those companies are more entrepreneurial than the stodgier state-run Jin Jiang. But that said, this small move by Jin Jiang looks like a prudent way to test out international markets as it looks for global growth opportunities. Read Full Post…
The latest stomach-churning results from fast food giant Yum (NYSE: YUM) are a good opportunity for an updated look at the impact that bird flu is having on companies that rely on the restaurant and travel industries in China. Somewhat ironically, these latest dismal results from the operator of KFC and Pizza Hut restaurants actually sparked a rally in Yum shares, since many were expecting the figures to be even worse than they were. Read Full Post…
