Home Inns & Hotels, the Chinese budget hotel chain, has completed its acquisition of its domestic rival, Motel 168. The company has sealed a complete 100% takeover of Motel 168 International Holdings Limited in a deal valued at US$470 million.
The acquisition of Motel 168 adds 295 hotels to the existing Home Inns portfolio of 1,004 budget properties, located across mainland China. Motel 168 properties will retain their currently branding, becoming Home Inns’ third budget brand following Home Inns and Yitel. In a statement, Home Inns said it expects to integrate most of the support functions of Motel 168 into its existing corporate platform, including human resources, finance, and legal departments. Motel 168’s current CEO, Binfu Lu will be appointed Executive Vice President of Home Inns and Deputy General Manager of the Motel 168’s brand, reporting directly to David Sun, Chief Executive Officer of Home Inns.
“This is an exciting day for Home Inns as we take a monumental step forward in our company’s history in executing our organic and inorganic growth plans and implementing our multi-brand strategies,” said Sun. “The addition of Motel 168’s brand and hotel portfolio provides us with an additional growth engine alongside our existing hotel network, including the Yitel brand hotels, to deliver continued expansion in China’s attractive economy hotel market. We will be dedicating necessary resources in the next 12 to 18 months to improve the performance of Motel 168 by refreshing the properties and implementing new marketing initiatives and operational best practices. We are confident and excited about Motel 168’s long-term prospects and the contribution it will make to our overall business.”
Home Inns generated total revenue of CNY1.7 billion (US$265 million) for the first six months of 2011, and expects its full-year revenue to grow by 15-17% compared to 2010. Motel 168 generated total revenues of CNY700 million for the first six months of 2011.