Dark skies ahead for star hotels, chains win
Star hotels in Beijing suffered a sharp slump in business in 2009 with revenues of some four-star hotels shrinking by two-thirds. Cheaper chain hotels meanwhile have apparently snapped up the business.
According to Beijing municipal bureau of statistics, the average revenue of star hotels dropped by 9.7 percent.
"We are the biggest victim in 2009 and our revenue has dropped by two-thirds," Yan Jie, a PR manager from Landmark Towers Hotel - a four-star hotel - told METRO. In 2007 and 2008 the hotel earned 100 million yuan annually, but it took only 30 million yuan in 2009.
"After the financial crisis, fewer customers came to us because domestic customers prefer more economical hotels and chain hotels," Yan Jie said.
"Since most businessmen just need a bed to sleep, luxurious accessories in four or five star hotels are seen as a waste of money," the PR manager added.
Yan said there was too much competition in the second half of 2008.
During and following the Olympic Games, more than 100 new hotels opened in Beijing.
Affected by the financial crisis, many companies cut their budgets for accommodation during business trips.
"I used to get reimbursement for my business trips," Yan Yongtao, director of a music training center from Shenzhen, told METRO. "But now I have to pay my own bill, so I choose chain hotels like Ibis which costs me a little more than 200 yuan a night."
The average cost of a standard room of a four star hotel is between 500 and 600 yuan a night, almost double the amount of a regular chain hotel, Yan Jie said.
Although some low-end private hotels in Beijing cost the same as the budget chain hotels, getting business is tricky.
"We have to rely on our regular customers," said manager Yan from Huguosi Hotel, a two-star hotel located in Xicheng district. "But we don't have a really good booking system like the chain hotels."
Song Jinzhi, a principal of a kindergarten in Qingdao who recently attended a meeting in Beijing, agreed with the manager. She said she didn't necessarily dislike low-end hotels but was put off them because she could never find them online and didn't trust their booking systems.
Currently, there are 37 one-star hotels and 269 two-star ones in the city, the bureau said.
Last year, the average cost of a room in a one-star hotel was around 205 yuan, roughly equivalent to a chain hotel, the Beijing Business Today wrote.
(China Daily 02/08/2010 page25)
