FX Hotels Group Inc (富驛酒店集團) plans to launch more directly operated outlets in China in the second half of this year as part of its bid to become a top mid-range hotel brand there.
The group manages 48 hotels in Taiwan and China under four brands. Of these 48, 10 are directly operated, with franchises making up the rest.
Eyeing the market potential of medium-priced business hotels in China, the company said its first step is to expand its major brand, FX Hotels (富驛時尚酒店), in the near term.
“The market for mid-range hotels in China has been overlooked by many people for a long time,” FX Hotels chairman Alvin Ho (侯尊中) told a media briefing in Taipei on Thursday.
Ho said the Chinese hotel market is polarized by luxury hotels on one end and budget ones on the other.
Based on the company’s research, about 40 percent of foreign visitors and 25 percent of Chinese tourists are inclined to stay at medium-priced hotels, Ho said.
Consequently, the company is determined to speed the development of its FX Hotels brand in this segment, he said.
Ho said the company’s directly operated hotels in China have all started generating profits and have an average room rate of between NT$1,700 and NT$1,800.
Since directly operated hotels are generally of a higher quality and have higher profit margins than franchised hotels, the company plans to open another two hotels under the FX Hotels brand in the Chinese cities of Suzhou and Hefei in the second half of the year, he said.
The company is also on track to sign franchise contracts with about 30 hotels this year, he added.
In addition, the group will continue looking for appropriate locations for its three other brands, including boutique hotel brand Boutix (泊逸精品酒店), FX Inn (富驛商旅) and luxury resort brand Artix (雅逸渡假酒店).
Shareholders on Friday approved FX Hotels Group’s proposal to distribute a cash dividend of NT$0.5 per share, based on its net profit of NT$51.08 million (US$1.74 million), or NT$1.54 per share, that it recorded last year.
However, for the first three months of the year, FX Hotels posted NT$17.7 million, or NT$0.5 per share in net losses, its stock exchange filing data showed.
Ho attributed the loss-making first quarter to the company’s move to sign leasing contracts in China for its upcoming directly operated hotels, which in the current International Financial Reporting Standards would raise renting costs even prior to the official opening.
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