Cheaper hotels in Beijing

Trip Start Jan 30, 2007
Trip End Dec 31, 2011

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Flag of China  ,
Saturday, July 26, 2008

Interesting how in the countdown to the Games that hotels in Beijing, who were planning on getting back their investments in three weeks, are now cutting their prices, due to a drop in demand.
Good to see the principles of supply and demand coming into play.

Beijing hotels get cheaper ahead of Games

BEIJING (AFP) - Beijing hotels that had hoped to cash in on an Olympic boom by hiking rates said Tuesday they were having to slash prices in a last-ditch bid to fill empty rooms.

Occupancy rates for the hotel industry were lower than expected in the run-up to next month's Games after many hotels more than tripled their normal rates, they said.

Now rates for three- and four-star hotels are tumbling as hotels try to fill empty rooms by attracting both overseas and domestic tourists.

"Bookings are so low that we have no choice but to cut prices," said Zhang Ting, sales manager for the Zhongyu Century Grand Hotel.

Zhang said that the hotel hiked its rates to 2,500 yuan (367 dollars) a night -- more than six times the rate of August last year -- in a bid to cash in on the Games.

"But we put our prices too high from the start because our expectations for the Olympics were too high," she said.

With only 30 percent of the hotel's 220 rooms booked for the Olympic period, the management had no choice but to slash prices, she said. Its rates for the Olympics have now been cut 20 percent to 2,000 yuan.

"The surrounding hotels are all doing the same thing," said Zhang.

Several other hotels contacted by AFP said that they were cutting prices in an effort to fill empty rooms.

The Super House International said its room rate had gone down from 3,600 yuan to 2,880 for one night. Cheng Hong Hotel said it had cut its room rate from 2,000 yuan to 1,400.

Average rates for four-star hotels had gone down from 1,500 yuan to 800 yuan, while three-star rates had gone down from 700 yuan to 400, according to reports in the state-run press on Tuesday.

Earlier this month the Beijing municipal tourism bureau said that the occupancy rate for four-star hotels during the Olympics was 44 percent -- while rates for three-star hotels were even lower.

Five-star hotels were more than 70 percent booked.

Beijing officials have said that the city was expecting 450,000 to 500,000 foreign visitors during the Games, with an additional one million Chinese tourists flocking to the capital.

However, tourist numbers have been far lower than expected so far this year, with Chinese press identiftying high hotel costs as one factor keeping domestic visitors away.

Repeated warnings of terrorism threats and strict security measures for the the Games that include tougher visa requirements are the reasons often cited for fewer than predicted foreign tourists.

Olympic Hotels Slash Rates as Costs, Visa Rules Deter Visitors

By Wing-Gar Cheng

July 23 (Bloomberg) -- Beijing hotels are slashing rates by as much as 50 percent for next month's Olympics in a last-ditch bid to lure tourists put off by soaring travel costs and difficulties obtaining visas.

Hotels that ramped up their prices, anticipating an Olympic windfall, are backtracking as bookings lag behind expectations. The capital's four-star hotels aren't even half-booked, compared with normal occupancy of 80 percent in August, Beijing tourism officials said.

``Even if the price is down to the bottom, it's no use because nobody is coming,'' said Liu Liping, sales manager of Beijing Ziyu Hotel, in an interview today.

His three-star hotel in the west of the city is only 10 percent booked in August and has dropped rates by almost half in the space of a month to 1,180 yuan ($173) per night.

Beijing's government said last week it expects 400,000 to 450,000 foreign visitors in August, compared with 420,000 a year earlier. Stricter enforcement of entry rules -- an Olympic ticket doesn't guarantee a visa -- and the impact of surging oil prices on flight costs haven't helped, tourism officials say.

China tightened its visa process in March after saying it foiled terrorist plots targeting the Olympics.

``China is going through a softer period leading up to the Olympic Games,'' Simon Cooper, chief operating officer of Ritz- Carlton Hotel Co., said in a Bloomberg Television interview in Hong Kong today. ``We are feeling the influence of the visa restrictions. We've lost some occupancy.''

Fully Booked

He declined to give numbers, adding that Beijing's two Ritz-Carlton hotels -- owned by Marriott International Inc. -- are fully booked during the Aug. 8-24 Olympics. The average occupancy for five-star hotels next month is 77 percent, Beijing's municipal tourism bureau said July 11.

Hotels can blame themselves for setting prices too high, said Wu Lide, spokesman for China International Travel Service Ltd., the nation's biggest tour agency.

``Travel numbers are dropping with surging air ticket prices and more expensive hotels, some of which are costing three or four times more than a year before,'' Wu said in Beijing.

Five-star hotels have lowered rates by an average 35 percent and four-star hotels by 29 percent, according to data on International Ltd. and Elong Inc., China's most popular online ticketing agents. Three-star hotels are cutting prices by 36 percent and two-star hotels by 35 percent.

Travelers planning a late trip to China's first Olympics may save more by leaving it to the last minute -- and by going directly to the hotel.

Later, Better

A room at the five-star King Wing Hot Spring Hotel was advertised at 8,128 yuan a night on, even after the hotel dropped its rate to 3,200 yuan from 4,388 yuan early this month. Occupancy remains below 70 percent, said Sun Xian, the hotel's marketing manager.

``The later the booking, the more discount,'' Sun said.

Beijing tourism officials are anticipating ``a rush'' in demand from domestic travelers, with more than 1 million expected. Xiong Yumei, deputy director at the Beijing Tourism Administration, said last week that tourism will bring in $400 million of revenue during the Olympics, ``slightly more'' than in August last year.

``Some hotels are adjusting based on the market demand,'' said Wei Yu, an investor relations officer at ``Chinese travelers tend to prefer to make their hotel and ticket bookings at the last minute.''
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