Chinese hotel mogul thinks now is the time to head abroad for deals
Ji Qi, the hotel mogul who took three Chinese start-ups including the country’s largest online travel agency Ctrip.com to list on the Nasdaq, said now is the time to expand abroad while the competition is being cowed to stay homebound by the trade war and China’s crackdown on freewheeling.
Outbound acquisitions have stalled among Chinese companies since April 2017, when regulators put half a dozen highly leveraged asset buyers under heightened scrutiny. The deteriorating trade war between the US and China has also led to increasing scrutiny by the Committee on Foreign Investment in the United States (CFIUS), which has deterred Chinese asset buyers.
“I need to think big,” said Ji, chairman of the Huazhu Group, in an interview with South China Morning Post in Shanghai. “When others feel it is the worst time to expand amid the trade war, it may have created opportunities for us to pursue lucrative deals.”
“In each of the market we land on, Huazhu aims to become a top five player eventually,” said Ji. “Our approach is to form alliances with local players using our management skills and technology.”
Apart from seeking to manage hotels for foreign landlords with its existing portfolio of 18 brands, acquisition of and equity investment into local hotel brands will also be a key approach adopted by Huazhu to quicken its internationalization pace.