(Yicai Global) April 25 -- Shares in BTG Hotels Group slumped today after the Chinese hotel chain said Japanese hotel management firm Okura Nikko Hotel Management will not renew its tie-up with BTG, after 19 years of working together, once their hotel management contract expires next year.

BTG Hotels’ share price [SHA:600258] was trading down 3.7 percent at CNY20.50 (USD3) as of 2 p.m. China time. The stock has lost more than 16 percent in value in the past week.

No reasons were given for the break up by BTG Hotels, which is part of the conglomerate BTG Group.

BTG Hotels will also no longer purchase a 50 percent stake in the equally owned joint venture set up by Tokyo-based Okura Nikko and BTG Hotels' sister company BTG Property in 2004, the Beijing-based firm said yesterday..

The hotel chain had said in March that it intended to pay CNY56 million (USD8.1 million) to take over BTG Property’s stake in BTG Nikko, which manages eight hotels with 3,363 rooms in China, in order to consolidate its hotel management business.

Affected by the pandemic, BTG Hotels’ losses widened more than 10-fold last year from the year before to CNY582 million (USD84.2 million). However, with the lifting of the zero-Covid policy at the end of 2022, BTG Hotels’ saw a big jump in business and it expects to rake in net profit of between CNY60 million (USD8.6 million) and CNY80 million in the first quarter.

Editor: Kim Taylor