Opportunity amid crisis helps Huazhu to expand

Huazhu Hotels Group, one of China's largest hotel chains, has seen expansion opportunities amid the COVID-19 pandemic, which has hit independent hotels and foreign hotels in China more than domestic chains.

The group, which was founded 15 years ago with its well-known economy hotel chain Hanting Inns, has been making inroads in the market of medium-to-upscale hotels in recent years. It said it will add 100 new medium-to-upscale hotels per year to reach 500 by the end of 2023.

Ji Qi, chairman and founder of Huazhu, said during the company's conference in Shanghai on Tuesday that the pandemic was a pressure test for the hotel industry and independent hotels had failed it.

Citing statistics from online booking website Ctrip that showed around 70,000 hotels were delisted this year, Ji estimated a large portion of them were independents.

"Many independent hotels are considering joining hotel chains and our franchise department has been very busy recently," he said.

Ji said that the big multinational hotel groups in China had also taken a big hit. This is due to a reduction of international travelers and an increase in teleconferencing caused by COVID-19 travel restrictions.

However, Ji added the pandemic has created many opportunities for the hotel industry, as the country is balancing its economic growth drivers from investment and export to consumption.

"Traveling is human nature. China has seen an ever-increasing tourist population in recent years, but there's a supply gap in hotels to that demand," he said.

"I think there are three trends for the Chinese hotel industry: from independent to chain hotels; from providing all-around services to selected services; and from pursuing star rating to focusing on brand building."

The Nasdaq-listed group has a total of 6,500 hotels in operation and 2,300 unopened hotels in pipeline, according to its financial report for the third quarter released on Sunday.

Jin Hui, president of Huazhu, said earlier that the company will keep its target of opening 1,600 to 1,800 hotels by the end of this year, despite the pandemic.

"We will maintain the rapid expansion and aim to open more than 2,000 hotels next year," Jin told online news portal Sina in November.

The group acquired German luxury hotel group Deutsche Hospitality in 2019 and plans to introduce some of its hotel brands to China, according to the group's news release on Tuesday.