• Economy still strong

Economy and budget hotels continue to be among the brightest lights in the hotel sector globally (outside of the US).

Last week, the third largest domestic economy chain in China, 7 Days Group Holdings, listed on the New York Stock Exchange, raising $111m.

The 7 Days listing follows an announcement last month by its compatriot, Home Inns, the largest Chinese economy player, that it is seeking to open 200 hotels in 2010 and have 1,000 properties by 2012.

7 Days currently has 283 hotels and more than 28,000 rooms. Home had 583 properties and more than 68,000 rooms at September 30.

Home has moved into opening predominately franchise properties – about 60% of the 200 it will open in 2010 will be franchise compared to a previous ratio of between 30% and 40%.

Total sales for the NASDAQ listed Home were up 38% to $107m in the third quarter. Net income was $12.7m.

In South East Asia, Tune Hotels, controlled by Malaysian budget carrier AirAsia, wants to open 64 hotels by 2013. The Tune hotels ambition extends not only across Asia, including countries such as India and the Philippines, but also into the UK and Australia.

The movement is not just one-way, however, as Premier Inn proved this week with the news of its first opening in India. The 105-room Premier Inn Bengaluru is to be followed by nine others over the next five years.

Premier Inn India managing director Aly Shariff said properties in Delhi and Pune were next. Premier Inn also has two sites in Dubai with a third opening next month.

And expansion is continuing in the UK. Travelodge announced this month that it had exchanged contracts on 10 hotels adding almost 860 rooms. Last month it received planning permission for what will be its largest hotel with 457 rooms following a 249 room extension at the existing sit in London's Covent Garden.

Premier Inn is also continuing to grow in the UK. It is currently marketing five hotels for a sale and leaseback deal, expected to raise up to £30m, to help fund growth. BNP Paribas Real Estate is handling the deal on hotels in Chester, Leicester, Newcastle, Plymouth and Thurrock.

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