The recent global economic situation has led to reduced business travel activities in China, and as a result, the Company experienced contraction in both chain-wide and like-for-like RevPAR (revenue per available room) during the fourth quarter of 2008.
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For the fourth quarter, the chain-wide occupancy rate was 84%, and ADR (average daily rate) was RMB 167. This resulted in fourth quarter RevPAR of RMB 141, a decline of 9% from RevPAR of RMB 155 for the fourth quarter of 2007. Also for the fourth quarter of 2008, like-for-like RevPAR for hotels that opened for a
t least 18 months contracted 3.9% compared to the same period in 2007. Due to such challenges, the Company believes that its revenue for the fourth quarter of 2008 will be at the low end of its previously announced forecasted range of RMB 535 - 555 million.
Home Inns opened a net of 205 new hotels in 2008, slightly exceeding its target of 200 new hotels for the year, to reach a total of 471 hotels in operation covering 94 cities in China. The 471 hotels in operation consist of 326 leased-and-operated hotels, which include the new H Hotel in Shanghai, and 145 franchised-and-managed hotels.
On a separate note, during the fourth quarter of 2008 the Company repurchased and retired RMB 219 million of its own convertible bonds for total cash consideration of US$16.59 million. After the repurchase, the Company had convertible bonds outstanding of RMB 895.7 million including principal and accrued interest.
The Company expects to recognize a gain for the convertible bond repurchases in the fourth quarter of 2008 and may effect additional such transactions in the future.
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Home Inns & Hotels Management, Inc., together with its subsidiaries, engages in the development, lease, operation, franchise, and management of an economy hotel chains in the People's Republic of China. The company operates its hotels under the Home Inn brand name. As of December 31, 2007, its Home Inns hotel chain consisted of 266 hotels, including 195 leased-and-operated hotels and 71 franchised-and-managed hotels. The company was incorporated in 2001 and is headquartered in Shanghai.
For investor and media inquiries, please contact:
Ethan Ruan, Home Inns & Hotels Management Inc. Tel: +86-21-3401-9898 x2004 Email: email@example.com
FD Beijing Peter Schmidt Tel: +86-10-8591-1953 Email: firstname.lastname@example.org