Chinese hoteliers hope to catch a falling star

Chinese hoteliers hope to catch a falling star
By Josh Noble in Hong Kong

January 22, 2014 3:53 pm
In austerity China, only one thing can top a five-star rating: a four-star rating.
Last year, more than 50 Chinese hotels asked to have their five-star ratings downgraded, according to state-run news service Xinhua, as they attempt to regain business from chastened Communist party officials.
A number of other hotels have suspended their applications for five-star gradings in the hope of staying on government registers of acceptably austere accommodation.
The newfound humility of the hotel sector is the latest sign of Beijing’s running battle with bling.
President Xi Jinping, who came to power last year, has launched a nationwide campaign to stamp out the kind of lavish spending that became the norm for those in all echelons of the party apparatus at the height of China’s boom.
The aim is not only to quell corruption and waste but also to relieve potential social pressures from the wide and worsening inequality in one of the fastest growing economies.
It has sent shockwaves across the luxury industry, hitting products from Swiss watches to sports cars to shark’s fin soup.
Even as the festive lunar new year period approaches, banquets and parties have been cancelled while officials have been ordered not to accept the bribes – or “gifts” – to which many had become accustomed.
Other strict instructions include “travelling with smaller entourages, simplifying receptions, and practising frugality”, according to Xinhua. Government workers have been told to leave only clear dinner plates after a meal so as not to be accused of over-ordering at the taxpayer’s expense.
The result has been a plainer form of celebration as the country prepares to ring in the year of the horse. Toothpaste has replaced the iPad on the new year’s gift list, while the annual raffle no longer comes with a prize. Instead, workers are heading to the staff canteen.
Beijing’s clampdown on conspicuous consumption has spread far beyond the civil service. Many of China’s richest business people plan to cut down on giving presents over Chinese New Year, according to a report by wealth-tracker Hurun.
The excesses of the rulers were made clearer during the trial of Bo Xilai, the now-jailed former party head of Chongqing, a city-province of more than 30m. During his corruption hearing, details emerged of his personal fortune, a family villa in the south of France and of African getaways on private jets.
The round of belt-tightening has hit hotel operators particularly hard owing to the loss of banquet business and overnight guests. Chen Miaolin, vice-president of the China Tourism Association, told Xinhua that hotel revenue fell by around a quarter last year, in an economy growing more than 7 per cent.
But, as always in China, there are opportunities amid the crisis. Mr Chen, who also owns a chain of hotels, plans to close one of them after the new year holiday and reopen it as a nursing home. For him, silver may be the new gold.