(Yicai Global) Sept. 25 -- Shanghai Jinjiang International Hotels Development Co. [SHA:600754], the listed arm of the city's leading hotel management company, Jinjiang International Group Ltd., will reorganize its business segments, and divide its assets into four brands -- Vienna Hotels, Plateno, Louvre Hotels and Jinjiang-Louvre Asia, a source at the group told Yicai Global.
Hotel businesses at Jinjiang International Group have become increasingly complex after a series of external acquisitions, and some similar businesses within the group may compete with each other, market insiders said.
"We're aware of this problem, and we've decided to divide Jinjiang hotels into four segments to create clear-cut business divisions," the source said. "They are Louvre hotels in France, Jinjiang-Louvre Asia, Plateno and Vienna Hotels. Louvre Hotels in France actually refers to Louvre Hotels Group that we acquired, and our later acquisitions Plateno and Vienna Hotels will operate as independent entities."
"Jinjiang-Louvre Asia is the key area of the reorganization," he said. "Its predecessor is Shanghai Jinjiang Metropolo Hotel Management Co. New brands from France including upper-middle market brand Plateno and Golden Tulip targeting the high-end market will be added to Jinjiang-Louvre Asia, in addition to the existing two brands, Jinjiang Inn and Jinjiang Metropolo. They will be the four flagship brands of Jinjiang-Louvre Asia going forward."
"It also marks an acceleration in the implementation of the globalization strategy at Jinjiang Hotels Group -- after the acquisition of Louvre Hotels, major French brands will be introduced to the Chinese market through the business restructuring," he said.
Apart from the business reorganization within Shanghai JinJiang International Hotels Development, the group will bring several high-end brands belonging to the North China branch of Jinjiang International Group to eastern markets.
To this end, the group set up Jinjiang Premier Hotels Co. to focus on the management of such upscale and luxury brands as Hotel Kunlun, J Hotel, Yan Garden and Jinjiang, he said.
J Hotel is a luxury hotel brand. Kunlun and Jinjiang are both five-star hotels with scalable business models, while Yan Garden is positioned as a traditional Chinese style upscale hotel.
Kunlun will likely take over the land currently occupied by the Hilton hotel in Shanghai's Jing'an district after its lease runs out next year, and Kunlun will also replace another local first-class hotel, he said.
In the future, Jinjiang Premier Hotels and Jinjiang Hotels will operate all high-end Jinjiang hotels, and JinJiang International Hotels Development will manage all mid-range and budget hotels that offer limited services, he said. Different brands may collaborate with each other and share resources. "Jinjiang, Louvre, Plateno and Vienna," may jointly carry out marketing activities, and the group will introduce the 'We Hotel' development sharing model.