Budget hotel company, China Lodging Group, has completed the purchase of a majority stake in Starway Hotels – a Chinese midscale hotel brand.
Launched by online travel company Ctrip.com in 2008, Starway now includes a portfolio of more than 100 franchised mid-market hotels across mainland China. Following the acquisition, China Lodging now plans to introduce two new operating models for Starway properties – ‘franchised-and-managed and ‘leased-and-operated’. The company said the new options would “capture the synergy between the company’s established distribution and operational capability and Starway’s brand awareness”.
“We also believe this expansion of Starway’s business model will enable Starway to add significantly more value to its franchisees and further strengthen Starway’s brand and enhance its profitability,” the company said in a statement.
Qi Ji, founder, Executive Chairman & CEO of China Lodging Group, commented; “Before this investment, our company operated three brands in the limited service hotel segment, namely, Seasons Hotel, Hanting Express Hotel, and Hi Inn. This new addition enriched our brand portfolio and enabled us to address the midscale hotel market with two distinct brands; Seasons with a standardised product and Starway with variety in design and consistency in quality. This new addition will strengthen our leadership position in the mid-scale market and accelerate our expansion in this segment.”
At the end of March 2012, China Lodging operated a portfolio of 675 hotels across 111 Chinese cities. With the Starway deal and China Lodging’s own expansion plans, this portfolio is expected to rise to approximately 1,000 hotels in year-end.
