Cendant's Hotel Group Signs Third Franchise Deal in China
22 April 2004 - 5:21PM
PR Newswire (US)
Cendant's Hotel Group Signs Third Franchise Deal in China
PARSIPPANY, N.J., April 22 /PRNewswire-FirstCall/ -- 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 2003. 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." Cendant Corporation's Hotel Group, based in Parsippany,
N.J., franchises 6,374 hotels representing 515,362 rooms on five
continents under the Super 8(R), Days Inn(R), Ramada(R),
Travelodge(R), Howard Johnson(R), Knights Inn(R), Villager, Wingate
Inn(R) and AmeriHost Inn(R) brands. Cendant's franchised hotels
sell nearly one out of every four economy and midpriced room-nights
in the United States, and Cendant franchises 11 percent of the
entire U.S. hotel room supply, according to Smith Travel Research
and Cendant financial data. All hotels are individually owned and
operated under franchise agreements with Cendant subsidiaries.
DATASOURCE: Cendant Corporation, Hotel Group CONTACT: Emanuel Naim,
Manager, Consumer Media Relations, Cendant Corporation, Hotel
Group, +1-973-496-0750 or Web site: http://www.cendant.com/
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