The Chinese outbound travel market has been strong of late. Outbound travel is expected to grow by 12.8% during 2013, according to the Global Business Travel Association report.

　　Chinese citizens are increasingly finding their travels are taking them out of country. Executives at Home Inns & Hotel Management want to follow them.

　　During the company’s third-quarter earnings call Friday morning in China, Home Inns officials said the company, which has 2,051 economy and midscale properties comprising 243,459 rooms in its portfolio in China, will pursue expansion outside China. Southeast Asia was referenced as one potential area of development for the company.

　　Executives did not disclose many details of the global expansion plan, other than to say the process was in the early stages.

　　The Chinese outbound travel market has been strong of late. For instance, outbound travel is expected to grow by 12.8% during 2013, according to the Global Business Travel Association’s “GBTA BTI outlook—China 2013 H2” report. Further, total spending on Chinese-originated business travel is forecast to grow by 14.3% to $224 billion during 2013. During 2014, Chinese business travel spending is expected to grow by 17.2%.

　　"This is a natural outcome as our customers are heading overseas,” CFO Huiping Yan said of the company’s expansion plans.

　　Huiping said Home Inns will seek partnerships in any global expansion projects as a way to mitigate the inherent risk in the development.

　　As for development in China, the company is going against the grain by focusing its efforts on first-tier locations, rather than tertiary and below-tier cities, Huiping said. The company intends to add at least 450 hotels to its portfolio during 2014.

　　Officials said the company is being careful not to expand just for expansion’s sake. “It is important to balance quality and quantity,” CEO David Sun said.

　　More than 60% of the company’s development efforts will take place in Tier 1 and Tier 2 cities in China. The economy Motel 168 brand, acquired by Home Inns in 2011, could be used in many of these locations, Huiping said.

　　"We have a different strategy because we have already established our footprint in the lower-tier cities,” she said.

　　An analyst asked Huiping whether acquisitions would be a part of the company’s growth strategy. She responded by saying that while the company would consider any transactions that come along, a majority of Home Inns’ growth will happen organically. The company opened a total of 107 hotels during the quarter.

　　Capital improvement plan

　　Sun said the company has committed to spending between 1.1 billion and 1.2 billion renminbi ($180.6 million to $197 million) as part of a capital improvement plan. He said the company’s 400 "mature” hotels will be targeted as part of the program.

　　The renovations will take place during the next 18 to 24 months, he said.

　　"This company is well represented to capture the next phase of the Chinese economy,” he said.

　　Sun said the Chinese economy has been gradually improving of late. Home Inns’ hotels recorded a nearly 90% occupancy rate and stabilized average daily rate during the quarter, which Sun considers to be a benchmark by which the overall health of the Chinese economy can be judged.

　　Still, Sun said company officials understand another dip is coming.

　　"It’s not realistic to expect 90% occupancy as new supply rushes into the market,” he said.