Riyueming Hotels Co., Ltd.

Riyueming Hotels is a budget hotel chain located in Dalian, China. The group currently consists of 4 separate hotel locations, with a staff of 151 and with total room offerings of 348. Revenues for 2009 totalled 16.11 million yuan. Northport Beigang owns a 35% equity interest in the chain.

The China Budget Hotel Industry

The rapid growth of the Chinese tourism industry led to increasingly prosperity of hotel subsidiary industries, and, especially after the SARS scare of 2003, the numbers of star-level hotels and budget hotels in China's major cities developed rapidly.

During the past three years, budget hotels have kept a rapid growth of above 50% and entered a continuous growth period.

The growth rate of the China hotel industry ranks first in the world. The scale of hotel construction in the whole Asia-pacific region is quite large, of which nearly half will happen in China.

Millions of businessmen and tourists, both Chinese and foreign, are taking advantage of a boom in China's budget hotel industry, which offers rooms for less than $50 a night, compared with about $200 at five-star hotels.

The number of budget hotel rooms has grown in the past eight years from practically zero to more than 100,000, with more than 100 brands competing for a bite of China's rapidly expanding domestic tourism market. The fast-developing Chinese budget hotel industry resembles the U.S. motel boom of the 1950s, which was fuelled by tourism and expanding highways."China has a population four times that of the U.S, and the potential to be the world's biggest budget hotel market," said Wang Lie, chief financial officer at the budget chain Hanting Hotels. Many Chinese travelers had to stay at grim "guest houses" run by local governments, notorious for spartan dormitory rooms, lack of heating and poor plumbing.

But in 1999, the central government began promoting travel as a way to stimulate the economy, creating three week-long national holidays that raised demand for hotel rooms. That unleashed a travel boom. In 2006, 1.39 billion domestic trips by Chinese tourists generated $85 billion, up 17 percent from 2005, the latest official data show. Industry sources say growth continues at a similar pace.

China's business travel market is worth about $10 billion, among the world's top four, according to American Express. In contrast to luxury travel, China's budget hotel industry is dominated by local brands. Though cheap hotels have lured budget tourists and backpackers from abroad, the vast majority of customers are locals who are unfamiliar with foreign brands.

Average investment in a budget hotel is just $1 million and can often be recouped in three to five years.