Budget hotels in China are booming. Their recipe of "two-star lobbies, three-star rooms and four-star beds" is increasingly popular with tourists and occupancy rates are going through the roof.

During the week-long National holiday, occupancy rates at about 3,000 budget hotels in Beijing reached 90 percent, according to the municipal tourism bureau. Major tourist destinations such as Shanghai, Qingdao, Hangzhou and Ningbo reported similar rates.

Jinjiang Inn, China's largest budget hotelier, had opened 139 hotels with 19,812 rooms by June this year and has almost doubled capacity each year for the last three years.

Other domestic operators like Home Inn and Motel 168 are expanding through franchising and certified operations, which are key expansion models for budget hotels in China.

"The budget hotel boom shows that recreation tourism is gaining popularity among ordinary Chinese people," said Wei Xiao'an, a researcher with the Tourism Research Center of China's Academy of Social Sciences.

According to Wei, budget hotels are a relatively new concept in China and do not yet have an official definition, but industry insiders say budget hotels have "a two-star lobby, three-star rooms and four-star beds."

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