The number of budget hotels in China lept from fewer than 500 to more than 16,000 in the decade to 2014. But the sector has become less profitable since 2011, and 7 Days put a freeze on new openings in top tier cities amid reports of overcapacity. 

“The explosive growth period is gone,” says Kiki Yang, a partner with Bain & Company, with brands “looking for a hedge”.