Zhang Minghou, assistant to the director of China Hotel Association, has told local media in Shanghai that CHA is drafting a standard on the operation of economy hotels and the regulation is expected to be formally released within the year.
CHA has also set up a Budget Hotel Special Commission, which is the first professional industry organization for budget hotels in China. The commission will reportedly be responsible for issuing industry reports, market forecasts and investment warnings in an effort to regulate the order of budget hotel market.
CHA estimates that only one third of the existing budget hotels will achieve the new standard, another one third will reach the standard after some necessary reforms and the rest may need to be fully renovated before they can meet the standard.
Previously, China's Ministry of Commerce and CHA jointly issued a report titled "China Budget Hotel 2007". The report showed that by the end of 2006, there were 100 budget hotel brands and more than 1000 budget hotels opened in China, which were nearly double the figures from the previous year. The three main domestic budget brands were Jinjiang Inn, Home Inn and Motel 168, but they have stiff competition from foreign brands like Super 8 and Express by Holiday Inn.