Cendant Hotel Group Signs Third Franchise Deal in China

23rd Apr 2004

Cendant Corporation’s Hotel Group today announced it will franchise Super 8 motels in China, consummating a strategy to compete there in three lodging tiers: two- to three-star hotels under the Super 8 brand, three- to four-star
hotels under the Days Inn brand and four- to five-star hotels under the
Howard Johnson brand. Tian Rui Hotel Corp, a privately held company based in Hong Kong, has
committed to develop more than 55 Super 8 hotels during the next five
years under a master license agreement. The company plans to open five
Super 8 hotels this year, including its first, its flagship location, next
month in Beijing. Tian Rui Hotel Corp believes its network of Super 8
hotels in China will generate nearly $150 million in gross revenue during
the first five years.

Up to now, the Super 8 chain has been developed exclusively in the United
States and Canada, where there are a total of 2,082 hotels representing
126,302 rooms.

In November 2003, the Hotel Group signed a master license agreement to
franchise Days Inn hotels in China with Frontier Group Pte Ltd., a
privately held company based in Singapore. The deal calls for the
development of more than 40 Days hotels during the first five years,
including five this year. Franchise rights to one existing Days Inn hotel
in Changchun were transferred to Frontier Group.

Cendant’s Howard Johnson brand has been franchised in China since October
1998 by the Shanghai-based Berrate Development Group, which currently
maintains a portfolio of two Howard Johnson hotels and has announced plans
to open another four hotels by the end of the year and at least one
five-star hotel in strategic provincial cities during the next three to
four years.

Berrate’s plans for 2004 include opening Howard Johnson hotels in Beijing,
Shanghai, Guiyang and Hangzhou. The Howard Johnson Paragon Hotel Beijing
was the brand’s first hotel to open in China in 2001. The Howard Johnson
Plaza Hotel Shanghai, the brand’s second hotel in China, opened in July


Steven A. Rudnitsky, chairman and chief executive officer of Cendant’s
Hotel Group, said the lack of quality economy, midscale and first-class
hotels presents a “substantial opportunity” for franchising the Super 8,
Days Inn and Howard Johnson brands in China.

“Other major hotel companies have focused principally on developing luxury
hotels,” he said. “Our business will be based on serving the growing
middle class, especially domestic consumers who have discovered the
benefit and flexibility of traveling the country on its growing network of
highways,” he said.

In looking for a master franchisee, Cendant sought financial strength and
a track record of business success, Rudnitsky said. “Tian Rui Hotel Corp
is the right company at the right time to lead an aggressive Super 8
development campaign in China.”


Recommended for you

Follow Breaking Travel News

Travel Events Calendar

Media Partnerships

Global Restaurant Investment ForumThe Hospitality & Tourism SummitCATHIC
ITB AsiaChina Outbound Travel & Tourism MarketThe Travel Marketing Store
Serviced Apartment SummitWorld Travel MarketIMEX
AHICWTTCRoutes Online
UBM Aviation