Hyatt teams up with BTG for brand in China

Hyatt Hotels Corp, a US-based hospitality chain, and Beijing-based BTG Homeinns Hotels (Group) Co Ltd have formed a joint venture to create an upper-midscale brand in China to capitalize on the country's expanding travel and tourism market.

Under the agreement that was inked in Shanghai on Tuesday, BTG's affiliate Homeinns Hotels Group, which has more than 3,000 hotels across China, will hold a 51 percent stake in the joint venture with Hyatt affiliates taking the rest. The new venture will have registered capital of 180 million yuan ($26.6 million) and investment plans of 500 million yuan.

Sun Jian, general manager of BTG and chief executive officer of Homeinns, said the new brand will be launched in June, targeting the middle to high-end segment of the country's hospitality market.

According to Sun, BTG has been scouting for potential alliances with international hotel groups for many years. The company chose to adopt a different approach to cooperation unlike the existing pattern of Chinese hotel companies developing the domestic market with foreign brands. "We don't want to be a 'surrogate mother', and prefer to build a new brand with foreign partners instead of just introducing an established foreign brand," he said.

In 2012, BTG joined hands with European hotel group Kempinski Hotels for a Chinese luxury hotel brand Nuo, which now has two hotels in Beijing.

The new upper midscale brand with Hyatt will be run by the joint venture, and both Hyatt and BTG will provide their resources－the international management experience and quality control from Hyatt and the large local network from Home Inns－to help the new brand to take off, Sun said.

Two model hotels of the homegrown brand, which is positioned in between BTG Yitel Premium and Hyatt Place, will be opened in 2020 in Beijing and Shanghai.

Stephen Ho, president of Hyatt in China, said the collaboration is expected to provide the US chain with deeper China insights, build brand awareness and grow loyalty with a new set of travelers.

"We are optimistic about the Chinese market," said Ho, who was the CEO of Marriott in China before joining Hyatt in 2018.

"The growing middle-income population and the world-class infrastructure (in China), such as new airports and high-speed train lines, will boost leisure trips and create demand for quality hospitality," he said.

Zhao Huanyan, chief analyst for the hotel industry at Huamei Consultancy, said in recent years several international hotel groups have started licensing their midscale brands in China, leading to fierce competition.

"BTG needs new selling points to retain its clients and the cooperation with Hyatt will bring recognition for its Homeinns and attract more property owners," he said