Economy hotels with clean and tidy rooms are attractive.

The Home Inns Group recently announced plans for further expansion in Xian on the basis of its existing 24 hotels, suggesting that the city is seeing an economy hotel "boom" in spite of the general economic downturn.

There are over 100 economy hotels in Xian, including big names like Home Inns, Jinjiang Inn, 7Days Inn and Hanting Inn. Such hotels pride themselves on being good value for money, conveniently located and widely distributed as networks. Standard room charges run to just Rmb170 per night, on average. The cheapest rate is below Rmb100.

Bookings for the May Day holidays this year reflect the popularity of economy hotels.

Hotel rooms were well sought after in all parts of the city. Some hotels had just single, standard rooms left on 1 May. Having reaped the benefit of doing business in this city with a huge market, economy hotel chains have been expanding their business in Xian at speed.

Home Inns has seen the fastest growth. As one of the largest economy hotel chains in China, it has opened 24 hotels in Xian in the past three years, accounting for nearly half the number of Home Inns properties in the entire North West.

As described by Jason Zong, Home Inns Group's Chief Operating Officer, "Xian is a city that has seen the fastest growth of Home Inns hotels in over 110 cities across the country."

Having achieved an occupancy rate of over 90% in the first quarter of 2009, the group will step up its expansion in Xian and extend its network to the entire northwestern market.

Other economy hotels have also done well in the city. In spite of the financial crisis, Hanting Inn has achieved an occupancy rate of over 95% in most regional cities, including Xian, except for those sites requiring specialty attention, like Yiwu.

Pleasant surprises

The expansion of economy hotels in Xian has taken many investors by surprise. "We have been trying to figure out the reasons for this expansion between the end of last year and the first quarter of this year, and our final conclusion is that it is due partly to the fact that the financial crisis has had only a small impact on interior provinces and partly due to Xian's tourism resources," said Zong.

In his opinion the financial crisis has had minimum impact on Xian and the implementation of the strategy of developing the Western Region has brought an increasing number of international companies to Western China cities.

This has triggered a change in the pattern of the national economy and brought more business travellers to the city.

Rich tourism resources have attracted a growing number of tourists to Xian and the new trend of individual travel, in particular, has generated a new market for economy hotels.

The city has witnessed increases in both business travel and tourism. "This complementarity has indeed given us a pleasant surprise since we first ventured into the city. We have had steady business, with tourists to fill the gap when the number of business travellers falls, and vice versa," Zong commented.

Foreign companies have been stepping up their investment in Xian in recent years. Business travel, tourism, conventions and exhibitions and festivals and events have all ensured the steady and sound development of the hotel industry.

Home Inns's development over the past three years has fully illustrated the huge potential of Xian's consumer market for tourism, said Yu Yajun, Deputy Director of Xian's tourism bureau.

from Yoyo Yu, Xian Office