Now, five-star hoteliers appear to be asking the same thing – and, spurred by Beijing’s anti-corruption push, are taking steps to make their properties look a little less fabulous.
According to Hangzhou hotel magnate Chen Miaolin, he and his fellow innkeepers are taking the extraordinary step of removing stars from five-star star properties.
It’s an industry response to pain, Mr. Chen said in comments reported by China Business News and confirmed to The Wall Street Journal by one of his deputies.
Amid China’s anti-extravagance sweep, hotels are downgrading themselves to score political points – and win back business from politicians. A year ago this week, President and Communist Party Chairman Xi Jinping declared war on “undesirable practices” by officials that he said risked creating an “invisible wall that separates the party from the people.”
As the Journal reports, the government has introduced a growing list of antiwaste and anticorruption regulations aiming to crimp the use of public funds on items ranging from luxury travel and meals to calendars.
The campaign presents particular trouble for fancy hotels, which have worked hard to build upper-class images.
According to the new modesty trend Mr. Chen describes, hotels are repositioning toward mid-range categories. Fewer stars mean lower prices — all the better to attract what remains of the pinched stipends Chinese officials say they now get for official travel.
In fact, Mr. Chen deployed the strategy at his own chain, New Century Hotels and Resorts.
New Century has repurposed a handful of its five-star properties, though its website still describes the company as China’s “largest private high-star chain hotel group.”
New Century says it is letting lapse the five-star certificate on a hotel in Nanjing, changing another one Tianjin into a retirement home and has recently closed two expensive clubs on the banks of Hangzhou’s famous lake.
The club closures follow a sudden move this month by authorities in Beijing to order shut luxury venues in parks that had operated for years.
Chinese media quoted Mr. Chen describing himself as a role model in the trend, and as “absolutely supporting and agreeing” with the government’s anti-waste campaign. “We made the decision according to the need of the market,” said Zhang Shu, New Century’s brand director, who answered questions by telephone on behalf of Mr. Chen.
China’s campaign is rippling through the global luxury sector. In announcing last year’s financial results, French hotelier Accor SA—which operates brands such as Sofitel, Novotel and Mercure— on Jan. 16 said it had “lower business” in China. Chief Financial Officer Sophie Stabile told analysts the weakness reflected China’s economy and unspecified “political constraints,” according to a transcript of her comments
China’s “campaign to promote morality,” as French Cognac maker Rémy Cointreau SA described it while announcing weak 2013 results this week, is also hurting sales of items offered in hotels.
It is unclear how many Chinese hotels have actually pried stars off the brass nameplates found behind their marbled check-in desks.
New Century’s Mr. Chen was quoted in media reports saying 56 Chinese hotels have officially applied to tourism officials for removal from the five-star category. (Mr. Chen’s colleague said the figure is an estimate.)
Downgrading a hotel isn’t quite so straightforward, according to the government agency that hands out the stars, the China Tourist Hotel Association.
“There’s no such thing as ‘downgrading stars,’ ” said a woman in the rating department who declined to be named. She explained that if five-star properties choose to change their ratings, they will be considered unrated.
Source: Wall Street Joural
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