Struggling hotels in China cut star ratings to woo customers following Beijing’s crackdown on government excess
January 22, 2014 Leave a comment
Struggling hotels in China cut star ratings to woo customers
Staff Reporter
2014-01-22
A total of 56 Chinese hotels have lowered or done away with their ratings to survive following Beijing’s crackdown on government excess, reports the state-run China News Service, citing Chen Miaolin, vice president of the China Tourism Association and chairman of the Zhejiang-based New Century Tourism Group.Hotels are graded on a five-star scale according to their facilities and quality of service. The higher number of stars, the higher the price.
More than 4,000 hotels across the country had been rated under this system, with 680 ranked five-star. But since the government launched its frugality drive last year to discourage officials from living fat off the public purse, hotel revenues have declined by 25%, while around 20 hotels located in resort areas close down every day, Chen said.
A survey conducted by the China Tourism Association found that during the first half of 2013, the average occupancy was 53% for three-star hotels and 50% for five-star hotels. In order to stay afloat, many hotels with star rankings have converted themselves into residence inns, nursing houses for senior citizens, office buildings or have begun offering accommodation without frills to lower their prices, Chen revealed.
Although Chen’s New Century Tourism Group, which boasts 64 hotels around China, including 40 five-star hotels, saw a 15% decline in revenue last year, he said he supported the government’s policy of banning high-end dining and entertainment for officials, which was good for society as a whole. He also praised the Zhejiang authorities’ decision to cut their budget for official vehicles, dining and overseas trips by 30% this year.
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