7 Days Group Holdings Limited Announces Strategy Update And Share Repurchase Program

　　7 Days Group Holdings Limited ("7 Days Group" or the "Company") (NYSE: SVN), a leading economy hotel chain based in China, today announces an update on its business strategy and share repurchase program.

　　Strategic Update:

　　As a core element of its strategy to expand its market share within China"s economy hotel industry, 7 Days Group has gradually increased its focus on the expansion of its portfolio of managed hotels in recent years. As of the end of the first quarter 2012, the Company had 1,044 hotels in operation, consisting of 417 leased-and-operated hotels and 627 managed hotels, representing a total of 104,191 rooms spanning 162 cities. A key benefit of the managed hotel model is that it allows the Company to maintain a rapid pace of expansion, gain greater operational leverage, expand its brand presence and generate stable fee-based income with a higher return on employed capital. Together, these factors have resulted in increasing profitability and stronger free cash flow generation.

　　In view of the successful expansion of the Company"s managed hotel portfolio to date, and the continuing strong demand from managed hotel partners, the Company has decided to accelerate the shift in its long-term strategic focus from leased-and-operated hotels to managed hotels.

　　In line with its revised strategic focus, the Company is increasing its guidance for managed hotel openings for the full year 2012 from 240 to 320. Concurrently, the Company is lowering its outlook for new leased-and-operated hotel openings for the full year 2012 to 80 from 120, due to the Company"s shift in strategic emphasis towards managed hotels and its decision to focus on capital investments with higher potential returns. This will result in a total of 400 new hotel openings in 2012, an increase from the previously announced target of 360 new hotel openings.

　　Based on its performance year to date, and the expected revenue contribution from managed hotels targeted to open in 2012, the Company is maintaining its full year revenue guidance of 28%-32% year-over-year growth. Furthermore, as the shift in emphasis towards a higher rate of managed hotel openings will result in a less capital-intensive business model, the Company expects to deliver further margin expansion in 2012 and an overall improvement on a year-over-year basis in net income, EBITDA and free cash flow.

　　Share Repurchase Program:

　　In light of the Company"s performance to date, its current market valuation and confidence in the long-term growth opportunities of the economy hotel industry in China, the Board of Directors has approved a share repurchase plan. Under the plan, the Company is authorized to repurchase up to US$25M million worth of outstanding American Depositary Shares, or ADSs, over the next 12 months, from time to time, in open-market purchases on the NYSE Euronext at prevailing market prices, in trades pursuant to a Rule 10b5-1 and 10b-18 repurchase plan, or privately negotiated transactions in accordance with applicable federal securities laws. The timing and extent of any purchases will be determined by the Company"s management, in its discretion, and will depend upon market conditions, the trading price of 7 Days Group"s ADSs and other factors, including customary restrictions on share repurchases. 7 Days Group expects to implement this share repurchase program in a manner consistent with market conditions and the interest of the shareholders. The Company will finance the repurchase with the Company"s cash on hand and cash generated from operations.

　　Mr. Alex Nanyan Zheng, 7 Days Group Co-Chairman of the Board of Directors and Chief Executive Officer, commented, "The shift in our new hotel opening schedule for 2012 reflects the strong demand from managed hotel partners who are drawn to 7 Days Group due to the power of our brand and the strength of our operating platform. While we have expanded at a rapid pace in recent years, we have not sacrificed our commitment to providing guests with a high quality overnight experience. This is evidenced by the fact that 7 Days Inn was recently named as the most influential brand in the economy hotel industry in China by the China Brand Power Index, an affiliate of the Ministry of Industry and Information Technology.

　　"The acceleration of our strategy to increase emphasis on the expansion of our managed hotel portfolio is an important step to further strengthening our position in China"s growing economy hotel industry. The adoption of a more asset-light approach to expansion is a logical fit with 7 Days" business model, as the less risky, less capital intensive and more profitable nature of managed hotels will allow us to maintain our rapid expansion strategy and further strengthen our brand image while increasing the Company"s long-term and sustainable growth of profitability and cash flow generation. In addition, we will be able to further leverage our competitive advantages, namely our best-in-class proprietary e-Commerce system and our industry leading loyalty club, streamlined operating model and well-established training program, to further improve our product and services thereby enhancing our guests" experience and satisfaction during their stay. We believe a focus on managed hotels bring us in-line with the predominant trend in the global lodging industry, where we are seeing operators worldwide focus increasingly on asset-light, profit-oriented managed and franchised operating models. Furthermore, we believe the positive impact on our profitability and ability to generate free cash flow will be sustainable and, in fact, will accelerate as we enter 2013 and beyond.

　　"We believe the share repurchase program is in the best interest of the Company and our shareholders. We remain confident in the long term growth prospects of the economy hotel industry in China, as secular demographic shifts continue to drive increasing demand for affordable lodging in a still highly fragmented market. We are committed to delivering increasing returns to our shareholders, and believe that we remain well positioned to strengthen our leading market position and to maintain our rapid expansion."