China's leading budget hotel franchise brand Home Inn has formally initiated its expansion plan in regional cities in southern China.

In the next three years, Home Inn will gradually enter 15-20 regional cities in the area centered on Guangzhou and Shenzhen.

A representative from Home Inn says that there is less space for budget hotels in big cities like Beijing and Shanghai with the competition in the hotel industry becoming fiercer. However, there is still potential for budget hotels in second-tier cities like Zhuahai and Zhongshan.

By the end of 2008, Home Inn will invest and build 10 hotels in Guangzhou, and 8 in Shenzhen. By that time, Home Inn will have 40 franchise hotels in southern China. All this will involve a total investment of RMR300 million.