Jinjiang Inn Co Ltd, China's first homegrown budget hotel brand, unveiled a new co-branded mid-range hotel chain called "Campanile & JinJiang" with France's Louvre Hotels Group SAS in Paris on Tuesday.
The move marks a new effort by the Shanghai-based Jinjiang to tap into the overseas market. The new chain is the latest development in a partnership between Jinjiang Inn and Louvre, Europe's second-largest hotel group after Accor SA, after an agreement reached in November 2011.
In a filing to the Shanghai Stock Exchange in November 2011, Shanghai Jin Jiang International Hotels Development Co Ltd said that its wholly owned subsidiary Jinjiang Inn had signed a brand partnership agreement with Louvre.
Under the partnership, both Jinjiang Inn and Louvre will pick 15 hotels from the most visited cities on each side to become co-branded hotels. In China, the hotels will be chosen from those located in Shanghai, Beijing and Xi'an, Shaanxi province. Meanwhile, the 15 hotels in France will be in cities such as Paris, Bordeaux, Lyon, Marseille and Nice.
Some tailor-made services will be injected into the hotels. For instance, the French hotels will boast Chinese brochures, signs, green tea, dim sum and Chinese TV channels. In return, Jinjiang Inn hotels will offer similar services targeted at European customers, including French coffee, croissants and even French sports newspapers.
Having opened China's first budget hotel in Shanghai in late 1996, Jinjiang Inn is keen to internationalize its brand by joining with foreign hoteliers, according to Zhao Huanyan, chief consultant at Shanghai-based SAO Hotel Solution Consulting. Zhao said increasingly wealthy Chinese tourists are enthusiastic about visiting France, the home of luxury goods, red wine and stylish clothing.
France is one of the top destinations for Chinese tourists visiting the European Union. "In 2011, Chinese visitors to Paris stayed in a total of 407,000 hotel rooms, an increase of 21.6 percent year-on-year and a rise of 62.9 percent over 2009," said Zhao.
Under the cooperation framework, Jinjiang Inn will receive a commission of 5 percent of the fee for a Campanile room if the customers booked the hotel via a recommendation from Jinjiang Inn. Jinjiang will reciprocate the arrangement, according to Zhao.
The average cost of a one-night stay at a Campanile hotel is about 100 euros ($131). If the reservation system performs well, it will provide sizable returns for both sides, but especially the Chinese company.
"The co-branded cooperation is just the beginning for the two parties, and the next-step capital operations will be more impressive," said a source familiar with the matter.
According to the source, Jinjiang's parent company is looking to acquire a controlling stake of 51 percent in Louvre Hotels and make a rapid entry into the European market.
Currently, Starwood Capital Group owns an 80 percent stake in Louvre Hotels and the US-based private investment group is waiting for an opportune time to offload those assets.
"Starwood Capital has contacted Jin Jiang International, expressing an intention to sell 20 percent of its stake in Louvre. A deal, if reached, would bring high proceeds to Jin Jiang International given Louvre's good reputation in Europe," said the source.
 

Source:china.org.cn