China Hotels and Airlines Face Strains From Government Austerity Measures

Skift Take

China outbound tourism may be booming, but internally the government’s austerity measures are hitting the luxury sector hard. For international hotels building like crazy in China, this is not reason to rethink plans, but it is humbling.

— Dennis Schaal

With curbs on Chinese officials’ banquet and travel budgets, China’s anti-corruption campaign hit high-end hotels and restaurants hard in 2013. As the crackdown shows no sign of slowing down, this trend will continue in the coming year, says expert Shaun Rein in a new Wall Street Journal video interview with China wealth reporter Wei Gu.

“Four- and five-star Chinese luxury hotels” that rely on business from Chinese officials will continue to be hit the hardest, says Rein.

This may even result in hotel closures — the JC Mandarin in Shanghai has already been shuttered. However, more consumer-oriented hotels such as boutique locations will weather the storm, since they’re not frequented by bureaucrat types.

Watch the video embedded below for the full interview, including his take on whether hotels’ coping measures will prove effective.

This story originally appeared on Jing Daily, a Skift content partner.

Additional links from Jing Daily:

Tags: china

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