Huatian Hotel Group has joined hands with New Century Hotels and Resorts, Celebrity City Hotels, New Beacon Hotel Group, Shuguang Hotel Group and GDH to invest a total of RMNB18 million (approx：US$2.8 million) to set up Zhejiang Lashou Internet Technology. Each of the six hotel groups is investing RMB3 million (approx：US$469,549) for an equal share of 16.666% in Lashou, and Huatian Hotels is making a cash-based investment.
Six Chinese hotel groups join hads to form Lashou JV
Huatian Hotels said the joint hotel platform will quickly set up a centralized channel and membership system for the member hotels, in line with the current hotel market trend of increased online transactions.
The six alliance members are all well known domestic hotel groups that collectively have 75,000 hotel rooms and over five million loyalty members. Increasing pressure from OTA online booking platforms has hampered the hotel groups’ profit growth and pushed them to set up their own platform to reduce their reliance of OTAs and enable the free flow of customer resources and secure direct sales at relatively low costs.
Meanwhile, Huatian Hotels will set up the Huatian Elderly Care company and will operate a luxury elderly care spa at the designated national scenic attraction at Changsha City Ningxiang Huitang Village. Huitang Village is one of China’s three major high-temperature hot springs with rich geothermal resources that make it a unique location for health spas. The famous spa village attracts visitors from around the country to visit the hot spring, relax, vacation and convalesce.
One industry observer said although Huatian Hotels won’t be seeing an improvement in performance in the short term for both of these investments, the two projects will have a positive effect on the group’s performance in the mid-term and long-term.
More importantly, Huatian Hotels is the first SOE under Hunan province’s State-owned Assets Supervision and Administration Commission to implement a mixed structural reform in which day-to-day company management is handed over to private enterprises and affiliates. It also isn’t ruling out other initiatives to further activate existing resources to promote efficiency and benefit from government policy.(Translation by David)
