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Breaking into the Chinese market: partnerships and joint ventures with local players

2 min reading time

Published on 09/05/18 - Updated on 17/03/22

Breaking into the Chinese market: partnerships and joint ventures with local players

While Ctrip has teamed up with AccorHotels, and Alibaba with Marriott, The Ascott is setting up a joint venture with Huazhu Hotels Group and apartment rental firm CJIA Apartments Group to expand its Citadines brand in China.

Ctrip announced the signing of a partnership with AccorHotels that will allow over 300 million registered Ctrip users to access personalized experiences from the French hotel group’s global portfolio. Meanwhile, the joint venture formed by Alibaba and Marriott in August 2017 creates an exclusive booking portal online. This is the first time that Marriott has created a one-stop booking experience that is exclusively for the Chinese market, since it acquired Starwood Hotels and Resorts in September 2016.

Simultaneously, Ascott forms a joint venture with Huazhu Hotels and CJIA Apartments to target 16,000 units under the Citadines banner by 2025, which would triple Ascott’s existing portfolio in China. Indeed, Ascott has more than 110 properties (20,000 units) and 30 of them are Citadines-branded properties (5,000 units) in 19 Chinese cities.

With a market capitalization of $10.4 billion, Huazhu has the third largest market share in China's midscale hotel segment with a total portfolio of over 357 117 hotel rooms (on January 1, 2017). Its subsidiary CJIA said to collaborate with over 100 property management firms to offer 10,000 apartments.

Kevin Goh, Ascott's Chief Executive, said: "The joint venture will fast-track Ascott's growth in China and accelerate the boost in recurring fee income given the shorter timeframe to open a new property. The manachise business model focuses on design and product standardization, as well as economies of scale, resulting in time and cost savings for the manachisees."

Jin Hui, president of Huazhu Hotels Group and CEO of CJIA Apartments Group, said: "Huazhu's collaboration with Ascott to expand Citadines through manachise will enable us to scale up quickly in the midscale hospitality segment, and broaden our range of brands for our customers. There is strong domestic demand for quality accommodation and we will continue with our multi-brand strategy to grow our presence in China."

Manachise is a hybrid of franchise and management contract, where an on-site manager appointed by the joint venture will manage the operations of the property.

In the meantime, HNA Group has sold its entire 25% stake in Hilton Worldwide for $5.9 billion. The sales will produce about $2 billion total profit for HNA.

 

Ascott International

Ascott International

Résidence de tourisme

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Huazhu

Huazhu

Hotel Group

  • Huazhu China
SEE THE NOTE
HNA // HNA Hospitality Group

HNA // HNA Hospitality Group

Hotel Group

  • HNA // HNA Hospitality Group China
SEE THE NOTE
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