Shanghai Jin Jiang International Hotels (Group) Company Limited: Company Strategy & Performance Analysis
Shanghai Jin Jiang International Hotel, headquartered at Pudong (Shanghai), was founded in the year 1995. The company operates star-rated hotels, budget hotels, and restaurants. It also undertakes franchising activities. Its key segments include service hotels, passenger transportation vehicles and logistics, full service hotels, and travel agency. The service hotels segment reported an increase in its revenue from US$167.0 million in 2015 to US$322.0 million in 2016, reflecting a growth of 93%. The service hotels accounted for 61% of the company’s total revenue. In terms of geography, China contributed to 79% of the company’s total revenue.
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Acquisitions to expand its hotels portfolio
Jin Jiang completed various acquisitions to expand its portfolio within the hotel business. The company had acquired an 80% stake in Vienna Hotels Group to add an additional 479 hotels and 60,000 rooms to its portfolio. In addition, the company’s significant partnership with Louvre Hotel Group and Plateno formed a combined portfolio of over 6,000 hotels and 640,000 guestrooms in 55 countries across all regions. This led the company to rank among the world’s top five hotel groups.
Expansion strategies to improve its market presence
Jin Jiang is looking to buy hotels in major European cities, including Paris to expand its luxury portfolio. The company is looking to address the growing demand in luxury segment to remain competitive in the market. The company announced its plans to expand its business operations with five new hotels by the end of 2017. This initiative will help the company to achieve its goal of building 2,000 Jinjiang Inn hotel rooms in the Philippines by 2020.
Aims to expand its managed and franchise portfolio
The company is aiming at improving its hotel base particularly in managed and franchise segment. In addition, the company has been pursuing inorganic growth strategies such as acquisitions to expand its footprint in the market. Out of the 5,868 select service hotels in operation, 1,093 were managed by Jin Jiang accounting for approximately 19% of its total select service hotels. It operates 4,775 franchised hotels, which account for approximately 81% of its select service hotels. The company looks to continuously generate significant revenues from the managed and franchise segment.