Cachet Hotel Group announced today the signing of an exclusive development agreement in Shandong Province with Qingdao Izunco Inn Investment Company (Izunco), one of the fastest growing hotel real estate and management companies in China. The primary objective of the partnership is to launch SAVANT Hotel by Cachet, a midscale lifestyle brand, in Mainland China. The introduction of SAVANT Hotel by Cachet marks a significant milestone in CHG's expansion across China and promises to complement a geographically diversified portfolio by entering new markets in the world's second largest economy.
"We are witnessing a fundamental shift in Chinese real estate as developers are looking to build boutique and midscale hotels that can address the growing demand for a higher quality of domestic tourism. In addition, a growing number of discerning but cost-conscious business and government travelers will provide a steady stream of consumers for midscale lifestyle hotels focused on tier 2 and tier 3 cities across China," commented Alexander Mirza, President and CEO of CHG. "The emerging midscale lifestyle segment is poised to capture spending from the burgeoning middle class who are looking for modern design and at an affordable price."
The targeted midscale segment is the largest hotel segment in China with US$36.3 billion total room revenues in 2015 and has seen the fastest growth with compounded annual growth of 12.5% over the past four years. This trend is estimated to continue in the future, with the most significant growth areas likely in tier 2 and tier 3 cities.
As the latest addition to Cachet's portfolio, SAVANT is positioned to serve travelers who are looking for uncomplicated, distinct and intuitive experiences. SAVANT will offer guests a comfortable and tech-savvy space that is both stylish and affordable.
Drawing on CHG's legacy and expertise in environmental sustainability in China, SAVANT by CACHET will be carbon neutral. The rooms will be prefabricated, with modules assembled off-site and delivered complete with carpeting, lighting and even showers, reducing construction and labor resources by over 50%.
The SAVANT prototype hotel will have gross floor area of 4,110 square meters featuring 105 guestrooms at an average fit-out cost per key of RMB 80,000 including the furniture and fixtures. Its innovative features will include Mobile Technological Platforms, Brilliant Cabin guestrooms with an average of 24 square meters, an interactive Scholar Bar, a spacious first floor lobby called The Habitat, a high-energy gym named Cardio Zone and Green Roofs where solar panels and plants will provide energy and fuel efficiencies for the hotel, keeping energy costs low.
"We are excited to partner with CHG who is dedicated to superior design and guest experience," said Zhang Yuyong, Chairman of the board of Qingdao Izunco Inn Investment Management Company Limited. "Our goal is to open no less than twenty SAVANT Hotels in the next three years in the Shandong province. By combining our deep knowledge of the region and Cachet's experienced international management team, we are confident in building SAVANT into a leading brand in the Chinese mid-scale segment."
CHG plans to grow SAVANT to a portfolio of 200 managed and franchised hotels across China's Tier 1, Tier 2 and Tier 3 cities. The properties be featured on its revolutionary technology platform Cachet World and located in a mix of city, airport and suburban locations including dual-branded CHG hotels. www.cachethotelgroup.com; www.aizunke.com.
