Hyatt and Homeinns Enter Into Strategic Joint Venture to Expand Footprint Across China
Hyatt Hotels Corporation (NYSE: H) and BTG Hotels (Group) Co., Ltd. (Shanghai Stock Exchange: 600258) announced today affiliates of Hyatt and Homeinns Hotel Group (affiliated with BTG Hotels which is also named BTG Homeinns Hotels Group) have entered a strategic joint venture to create a new hospitality brand. The brand, to be named later, is aimed at meeting the evolving needs and aspirations of a growing number of young travelers in the upper-midscale segment in China, providing them with a seamless and premium travel experience.
In an unprecedented move expected to set a new benchmark for the local hospitality industry, the collective strengths of Hyatt's global experience in premium hospitality and BTG Homeinns' scale as one of China's largest hotel chains, is expected to position both companies to capitalize on China's expanding travel and tourism market. According to the Ministry of Culture and Tourism of The People's Republic of China, domestic tourism revenue saw a 13% increase last year, recording CNY5.05 trillion in revenue. As income levels continue to rise, China's middle class is seeking higher-quality offerings and travel experiences.
Under the joint venture, Hyatt and BTG Homeinns will create and launch a new hospitality brand positioned to compete in the currently underserved upper-midscale segment. In a bid to better serve the unique needs of Chinese consumers, the new and entirely homegrown hotel brand will be built specifically to meet Chinese travelers' preferences and growing expectations for a seamless, comfortable and convenient travel experience.
"There is a definite opportunity for us to make a mark in the growing upper-midscale segment," said David Sun, general manager of BTG Homeinns Hotels Group, chairman & chief executive officer of Homeinns Hotel Group. "The combination of Hyatt's expertise in premium hospitality with our local insight and vast network will ensure our collaboration will create opportunities and benefits for Chinese travelers as well as the overall hospitality industry."
"With 70 iconic hotels and a pipeline of more than 100 properties in Greater China, Hyatt is committed to a long-term strategy of purposeful growth in the region, said Stephen Ho, president of Greater China, global operations, Hyatt. "This collaboration is expected to provide Hyatt with deep China insights, build brand awareness and grow loyalty with a new set of travelers."
"All of our brands are positioned at the high end of every segment in which they operate, and this joint venture will be no different. Strengthening our representation in the underserved upper-midscale segment will advance our China commitment and is designed to deliver sustainable growth and value to all of our stakeholders. We look forward to bringing our brand of personalized hospitality and culture of care to more Chinese travelers," added Mr. Ho.
BTG Homeinns Hotels Group operates one of China's largest and fastest growing economy hotel chain - boasting a presence of about 3,900 hotels in more than 400 cities. In recent years, BTG Homeinns has invested in expanding its portfolio of midscale hotel brands to meet the growing demand amongst Chinese travelers seeking to upgrade their travel experience. It has developed a strong presence of about 600 midscale hotels across China, including its successful brands of Yitel Premium, Homeinnplus and Homeinn Selected.
"We believe a joint venture relationship, where both parties are invested in the brand and the ultimate outcome, will be the most strategic collaborative model to make an impactful entry into this complex and competitive market. Our goal is to pioneer a unique home-grown local brand with international backing that will serve as an important competitive advantage for both parties - a win-win situation for Homeinns, for Hyatt and for Chinese consumers," added Mr. Sun.
The joint venture is expected to unveil hotels under the new brand across gateway cities such as Shanghai, Beijing, Guangzhou, Shenzhen and other cities in China in the next five years. The new brand will be managed independently by a team of highly experienced hospitality experts.
The term "Hyatt" is used in this release for convenience to refer to Hyatt Hotels Corporation and/or one or more of its affiliates.