Question-and-Answer Session
Operator
Your first question comes from Alex Xu - Brean Murray.
Alex Xu - Brean Murray
Great quarter. I just have a couple quick questions for you. First of all, I look at the income statements, the other income line seems pretty high this quarter. Can you tell me a little bit as to what's in that other income line?
May Wu
Other income consists primarily of financial subsidies or tax rebates from the local tax bureau or the other Chinese commerce bureaus, and it's highly unpredictable from quarter to quarter. But if you look on an annualized basis, it's pretty consistent as a percentage of revenue and represents a very small amount of our income.
Alex Xu - Brean Murray
You mentioned a few things about your costs and whatnot. One of those are personnel costs. Other than adding new staff members, is there any kind of a salary or wage pressure in terms of increases during the quarter, because it is probably pretty hard to find people, given all the economy hotels set up in the country?
May Wu
Overall, we're not seeing substantial salary or wage pressure on the hotel level. We are seeing some salary and wage pressure at the headquarter level, but the impact of that is limited. One thing that we're monitoring closely at the hotel level is the government's increased demands for employers to increase benefit reserves for employees. But so far, this impact is already reflected in our current figures, and they are manageable at this time.
Alex Xu - Brean Murray
lastly, on the question on the new hotels, can you break down the opening of the new hotels for this quarter between the tier one and tier two cities?
May Wu
The new hotels that we opened this quarter, they're all in second-tier cities.
Alex Xu - Brean Murray
All 26 hotels are in second-tier cities?
May Wu
All the leased and operated hotels are in the second tier cities, all 26 hotels.
Alex Xu - Brean Murray
Then if you look at your pipeline -- which is pretty strong, by the way -- the 63 hotels pipeline, do you have a breakdown on that in terms of first tier versus second tier?
David Sun
I think it's only two or three hotels in first tier cities, most of them are in the second-tier cities.
Operator
Your next question comes from the line of Chris Woronka - Deutsche Bank.
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