How is the high-end hotels market in China ?
Most of the hotels and restaurants around the world want to increase their number of stars. This is their first goal!
A DOWNWARD TREND
The rating assigned to the hotel property is used to define their status and ensure their high profits . But now, these benefits are declining. According to a report by the Association of Tourist hotels in China , total revenues of five-star hotels fell 14 % during the first half of 2013 .
Faced with this trend, business leaders are already in action. Miaolin Chen , president of New Century Tourism Group based in Zhejiang province in eastern China , chose to delay the plans to upgrade its five four-star hotels to five-star New Century . Chen, who is also vice -president of the China Tourism Association , said that other lower-rated hotels have done the same, and 56 five-star hotels have even tried to lower their ratings last year.
Chen explains that this decline may be explained by the result of the Communist Party of China which has led to a recent ban on official expenditure in five star hotels at public expense .
But this ban affects not only the upscale accommodations . The entire hospitality industry of China has suffered from those effects last year, with more than 20 hotels closures every month. The industry has also reported a decrease of 25 % of its total revenue in 2013 , according to Chen .
The average Chinese hotel accommodation , three stars or more rate fell six percentage points to reach 53% in the first half of 2013. Hotels catering also suffered , with a drop of 17.2 % on their average income . The average revenue generated by events in hotels, such as official meetings , fell 17.8%.
Yang Xiaowei , director of sales Lijingwan International Hotel Beijing, told China Daily that many government organizations have canceled their banquets traditional year-end because of these cuts digits. In 2013, the business generated less than four million yuan ( 655,738 U.S. dollars ) , down six million yuan, compared with 2012.
Dispositions to take
” The high-end restaurants and hotels are really suffering , almost 60 % of our revenue comes from government departments and state companies” , said Yang .
The industry leaders are now trying to catch up the shortfall through innovation. Yang led the efforts of his company to private consumption, providing more opportunities for consumers seeking to improve their online presence. Chen plans to reopen one of its hotels as disused nursing home after the Spring Festival .
Zhang Yan, a sociologist at the Academy of Social Sciences of Shaanxi Province , said that this type of business strategies is essential in the current political climate of China .
They must innovate in their operations and marketing activities should be more attractive to each individual consumer. Meanwhile, as many hotels available on the market , mergers and acquisitions are necessary this year.
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