Motel 168 Sees Q3 Performance Lift

　　SHANGHAI—Home Inns & Hotels Management’s Motel 168 brand saw a performance lift during the third quarter, executives said.

　　Total revenue for Motel 168 was 398.9 million renminbis ($64 million), coming in at the high end of Home Inns’ guidance, CEO David Sun said during the company’s third-quarter earnings call with analysts.

　　Further, occupancy increased to 82.7%, rising by approximately 5% to 10%, CFO Huiping Yan said.

　　Huiping credited seasonality as well as incremental benefit from ongoing integration efforts as reasons for the uptick. With the overall work of integrating Motel 168, which Home Inns acquired in May 2011 for $470 million, into Home Inns’ portfolio well under way, Huiping said the next phase will be to focus on the operational execution of Motel 168.

　　“We believe the existing effort has generated results that are so-called ‘low hanging fruits,’ and then going forward, the focus and effort will be on again execution and delivering results,” she said.

　　As of 30 September, there were 146 Motel 168 properties under the Home Inns umbrella. The company recently co-branded a Home Inns and Motel 168 property together in two locations. The company intends to explore that development strategy further going forward, Huiping said.

　　She added that the company has co-located other Home Inns brands and has seen success in doing so in terms of higher occupancy and market share because the co-located brands have different brand perceptions and draw different audiences.

　　“The emphasis is on selected locations,” she said, which is why the company is very cautious and gradual in implementing this model with Motel 168.

　　Overall, Home Inns is planning 50 to 60 Motel 168 openings during 2013.

　　Development

　　Home Inns opened 108 properties during the quarter, 69 of which were franchised-and-managed and the remaining 39 were leased-and-operated. As of the end of the quarter, Home Inns’ hotel development pipeline totaled 252 hotels either built or under construction, 165 of which will be franchised-and-managed.

　　Home Inns had 1,682 hotels representing 204,678 rooms in its portfolio as of 30 September.

　　“Driven by strong demand in our franchised-and-managed hotels, we expect to open no less than 360 hotels in total for the year and exceed the high end of our new hotels opening guidance for the year,” Sun said.

　　During 2013, Huiping said the company is eyeing a similar number of overall openings as is expected in 2012, with 65% to 70% of the hotels being franchised-and-managed.

　　Included in the openings during the quarter were two Yitel-branded properties, Home Inns’ midscale/upscale offering. The company introduced the brand in 2010 and at that time had plans to open 50 hotels within four to five years. There were five Yitel hotels open as of 30 September.

　　Huiping said the growth plan for Yitel this year is to have five to six properties open, with an additional six to 10 opening during 2013. The focus will be on first- and second-tier cities in China, Huiping said. The company during 2013 is also planning to roll out its first franchised-and-managed Yitel hotels.