Alex Zheng, chief executive officer of budget hotel chain 7 Days Group.
Budget hotel chain 7 Days Group plans to have 1,800 hotels under its fold over the next five years by setting up more new units as part of its efforts to catch up with industry leader Home Inn, according to its founder.
The third-largest budget hotel group in China said it plans to have 320 hotels under its umbrella by the end of this year, compared with five four years back, said Alex Zheng, chief executive officer of the company.
"We will see strong growth over the next few years. Our network will expand 40 percent annually to 1,800 in 2014," said Zheng.
The leading budget hotel operator based in Guangzhou got listed on the New York Stock Exchange in November. It was the second such public float in the country's budget hotel sector after Home Inn. Through the fund raising, the company planned to expand its chain and to bring itself onto a faster growth track to cash in on the rapidly growing budget hotel market.
Zheng said 7 Days was also contemplating entry into overseas markets over the next five years, but he added that "the Chinese market, especially the southern and eastern regions, will continue to be our major focus".
The company raised funds worth $111 million from the float. Its shares surged 13.64 percent to $12.5 on their debut, and rose 3.12 percent to $12.21 yesterday.
"I am not too concerned about the present share prices. Obviously it will go up as we keep rolling out our expansion," said Zheng.
Budget hotel groups in China were less affected by the global financial crisis than high-end players. Home Inn said its occupancy rate rose to 97 percent during the third quarter, 11 percent higher than a year earlier.
Zheng said that 7 Days has not seen any negative impact till now and in the past two years, its occupancy rate remained at close to 90 percent.
The nation's economic recovery has also spurred a host of other budget hotel chains to chart fund raising plans.
Many like Hanting Inn are contemplating NASDAQ listings, while others are finalizing plans.
The budget hotel sector in the country is dominated by Home Inn, Jinjiang Inn and 7 Days Inn. The three companies together hold nearly 40 percent of the market share.
