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Super 8 closes Chongqing hotel

Super 8, one of the largest budget hotel groups in the world, has closed its only hotel in Chongqing.

 

According to a senior manager of Zhong An Plaza, a company with which Super 8 signed a one-year franchise agreement in 2007, Zhong An was entitled to use the brand of Super 8 in Chongqing under the agreement with Super 8, but in practice they found that Super 8 places too many constraints on franchisees' operations in areas such as marketing and group activities. In addition the hotel's room occupancy was always low, so they suffered a loss during the one-year period. That's why they decided not to renew the contract with Super 8 after the original agreement expired.

 

In 2006, Super 8 declared that it would choose five franchisees in Chongqing to open hotels. However, none of these hotels has been opened yet.

 

A representative surnamed Fang from Super 8 China was quoted as saying that the reason that the Chongqing hotel was closed might be because of the high cost of decoration in the initial stage and the lower rates of Chongqing's budget hotels compared with those of other cities in China. Fang said that Chongqing is one of the key markets for Super 8, so they won't give up on expansion into the city. Instead, they expect that their franchise hotel at Langgao Conference and Exhibition Square will open this year. Fang also added that they are also selecting locations at Shiqiaopu and Shazhengjie and preparing to open their first directly-run hotel in Chongqing.

 

(China Hospitality News February 12, 2009)