Main Section Idea: Growth of China Lodging Group in the past year; Subpoint: Internal

expansion (increasing number of rooms, develop new hotels in cities), Acquisition

Main Heading Place Holder
China Lodging Group has expanded rapidly during the past year, both internally and externally.
Externally, since the acquisition of Orange Hospitality in 2017 to expand the number of upscale
hotels under its own brand, China Lodging Group turns its strategy globally. It plans to acquire
the largest private hotel group in Germany, the Deutsche Hospitality in the near future.
Internally, it opened total 543 new hotels in China during the third quarter, half of them is
economy and half is middle and upscale hotels.
Acquisition of Deutsche Hospitality
China Lodging Group announced through its wholly owned subsidiary China Lodging Holding
Singapore, entered into a share purchase agreement to acquire all shares in Steigenberger
Hotels Aktiengesellschaft, Germany, for a base cash consideration of about $700 million1, which
is subject to net working capital and other adjustments as provided in the Agreement. The
acquisition is expected to close on or around early next year. Since the management just
announced the information two days ago, more information will be published during Q3
earnings call on November 13, 2019.
The Chief Operating Executive says2 that this acquisition will help China Lodging Group bring
European hospitality concepts into Chinese market, bring expertise and complete its strategy in
operating upper upscale hotels. It will bring more choices and higher service standards to
customers. China Lodging Group will work closely with DH’s employees, respect their tradition
and open a new chapter for the industry.
Internal Expansion focusing on Upscale Hotel Chains
China Lodging Group has accelerated its pace to open new hotels in China. The net revenue for
2019 Q3 is expected to increase by 10%-11& this year than in 2018.3 Their unopened hotel
pipeline further accelerated to an historical high of 1,736 hotels as at the end of September.
More information will be enclosed in the third quarter earning calls.
In the third quarter, total 548 hotels opened in China including 535 Manachised and franchised
hotels with 13 owned hotels. The room of operations increases 504414 in total.4 The

1 Huazhu Group Limited Announces Acquisition of Deutsche Hospitality. (2019). Huazhu Group limited [PDF file]. Retrieved from
http://ir.huazhu.com/news-releases/news-release-details/huazhu-group-limited-announces-acquisition-deutsche-hospitality

2 Baijiahao.baidu.com. (2019). 华住收购德国第一大本土酒店集团 100%股权. [online] Available at:

https://baijiahao.baidu.com/s?id=1649331259882258632&wfr=spider&for=pc [Accessed 6 Nov. 2019].

3 Huazhu Group Limited Announces Preliminary Results for Hotel Operations in the Third Quarter of 2019. (2019). Huazhu Group limited [PDF
file]. Retrieved from http://ir.huazhu.com/financial-information/annual-reports

4 Anon, (2019). [online] Available at: http://www.bbtnews.com.cn/2018/0314/232958.shtml [Accessed 6 Nov. 2019].

management focusing on expanding in the midscale and upscale hotels 5 as well as Economy
hotels where the company first started.

5 Limited, H. (2019). China Lodging Group, Limited and OYO Announce Strategic Alliance. [online] GlobeNewswire News Room. Available at:
https://www.globenewswire.com/news-release/2017/09/13/1120103/0/en/China-Lodging-Group-Limited-and-OYO-Announce-Strategic-
Alliance.html [Accessed 6 Nov. 2019].